The blogosphere is rightfully abuzz over the recent paper by Bessen, Meurer and Ford. They are extremely careful researchers. They focus on litigation over software patents and measure losses to the victims of patent lawsuits and gains to the trolls who bring them by looking at changes in stock market valuations. They find the net loss to the economy from these lawsuits running at about $80 billion per year. They conclude

that the loss of billions of dollars of wealth associated with these lawsuits harms society. While the lawsuits increase incentives to acquire vague, over-reaching patents, they decrease incentives for real innovation overall

Patents: your government discouraging innovation.

Dean Baker takes issue with a Washington Post story link here on doctors shilling for drugs and drug companies paying them big money to push greater use of their drug including for uses prohibited by FDA link here.

The Post article is a routine description ("fair and balanced" as the big papers like to claim) leading to the fact that the doctors are well-paid for what amounts to treating patients while never seeing them. In some cases they push uses that are criminal, as when they recommend or prescribe a drug for unapproved use.

Baker's problem with the Post piece is its failure to recognize the central role of drug patents in this business. Without the patent, the drugcos couldn't charge the prices that make the big marketing payoffs and their huge profits possible.

Baker fails to note that this might just have something to do with the high cost of health care in the US (highest in the world) or the funding to pay campaign funds to crucial legislators to leave the system unfixed.

How sill can patents get? This silly:

http://www.courthousenews.com/2011/09/13/GameShow.pdf [PDF link]

Thanks to CourtHouseNews.com for reporting this.

Apparently the Game Show Network felt it could just steal another company's property by having a computer match, rank and distribute awards to competing contestants based on their relative skill levels. They obviously need to pay dearly for this moral outrage...

More on the specific patent that the U.S. Patent office deemed worthy enough for a monopoly here:

http://www.google.com/patents?id=9ysFAAAAEBAJ&printsec=frontcover&dq=6,174,237&hl=en&ei=NXxvTvDyEOzOiAKYiIG4Bw&sa=X&oi=book_result&ct=result&resnum=1&ved=0CC0Q6AEwAA

John Bergmayer has a very nice piece on Project Gutenberg link here written on the occasion of the death of its founder, Michael Hart, "who passed away this week, after founding the project by typing in a copy of the Declaration of Independence in 1971. In doing this, Hart invented the ebook, and what became Project Gutenberg release #1 is still available online."

I had not realized that such a fundamental invention had been around that long. It gives me hope, given that some things in IP have gone right, we may hope for more despite the evidence to the contrary.

Bergmayer repeats Hart's fundamental realization about his project. To preserve creations, they need to be endlessly repeated so that there will be lots of copies (unlimited?) for future generations to be able to access and to preserve them from technological change that is already limiting access to some material that cannot be read by the latest computer software. Thus, they need to be kept in a simple and widely accessible form, such as plain text rather than as a PDF.

Andrew Pollack reports that "Myriad Genetics retained its monopoly on a lucrative genetic test for breast cancer risk when a federal appeals court recently upheld the company's patents on two human genes and the validity of gene patents in general." It seems to me that this is so wrong as to defy any rational explanation link here.

Remembering that the constitutional basis for patents is that they encourage innovation, the patent is here granted on the wrong thing. A gene is not invented or developed. It is not a creation of human ingenuity. The patent should not be on the gene but on the process or procedure to identify it. The Appeals Court ruling pretty clearly identifies the gene as patentable, apparently because the procedure has transformed it. The finding is buried in 105 pages of opinion link here .

Worst result: Gene patents have in general been upheld. Let's hope the Supremes to overturn it.

I missed one IP story in this issue of The Economist. Louboutin is suing Yves Saint Laurent for infringing it trademark by producing high-end women's shoes with red soles link here.

The extremes of IP law keep getting nuttier and nuttier. What shade of red is it trying to copyright? Would pink cross the line? How about reddish purple? Anyway, sue and YSL may just fold its tent and go away.

This week The Economist has three stories and an editorial on intellectual-property link here here, here and here . The editorial is unusual in the strength of its critique and its suggestions for remedies.

"First, patents in fields where innovation moves fast and is relatively cheap like computing should have shorter terms than those in areas where it is slower and more expensive like pharmaceuticals. The divergent interests of patent-holders in different industries have held up reform, but there is no reason why they should not be treated differently: such distinctions are made in other areas of intellectual-property law. Second, the bar for obtaining a patent, particularly for software or business methods, should be much higher (as it is in other countries), and the process of re-evaluating bad patents should be more open and efficient. Finally, there should be greater disclosure requirements of the ownership of patent portfolios, and patent cases should be heard by specialised courts (as happens in other areas of law), rather than non-expert juries in advantageous jurisdictions in Texas. That would make life harder for trolls. These fixes would help America's patent system encourage innovation rather than litigation."

The three articles cover piracy which varies widely among countries, patent warfare among big companies, and Google's bid for Motorola Mobility. Bottom line: patents legally required to encourage innovation don't now.

Steve Pearlstein writes about "High tech" patented battle maneuvers link here.

He begins strongly with this: "... out in Silicon Valley, patents have become the competitive weapon of choice, used by high-tech giants to bludgeon rivals and crush upstarts."

He then says that "The best reporting I have found on the subject was by National Public Radio" link here which focused among other places, on an old adversary to readers of this blog, Intellectual Ventures and the whole business of patent trolls, suing about patent violations in East Texas.

He observes "What may have started out as a clever way to "turbocharge technological progress," seems to have morphed into something closer to a Jersey City protection racket. When Intellectual Ventures came knocking on the door of tech companies offering to license its patents, companies began to get the sense that it was an offer they couldn't refuse.

Pearlstein then turns to the proposed legislation now in Congress and commends it for making it easier to challenge a patent before issuance while adding "missing from the bill... is any attempt to narrow the range of what can be patented in the areas of software and business methods".

He closes by suggesting that big companies with lots of patents aren't interested in fixing that, so nothing will come from Congress or from the Supreme Court which "has done so much to slam the courtroom door on consumers and workers [and] left it wide open for corporate interests running a legal protection racket. If there ever was an abuse of the judicial process, this is surely it."

Pearlstein's voice on these issues is a welcome addition to the growing coverage and number of articulate critics of patents.

The Strip By BRIAN McFADDEN

http://www.nytimes.com/interactive/2011/08/20/opinion/s...

The New York Times has been doing better on patents and copyrights recently, exemplified today with a story entitled A Bull Market in Tech Patents link here .

The article includes this drawing of a smart phone and the number of patents - 250,000 according to Google--that affect each of the subsystems:

That is quite an invitation to lawsuits and lawyers looking for fat fees.

But the Gee-Whiz aspect of these numbers is overshadowed by the costs in innovation in an industry hypnotized by who has the latest gizmo. As the article goes on to note, "This patent gold rush has a darker side. It is diverting money for innovation from industries crucial to the economic future of the United States, analysts say. Patents were created as an incentive for innovation, giving inventors a temporary right to commercialize their ideas, without others copying them. While the recent blockbuster patent deals may make sense for the companies, analysts say, they are fed largely by legal considerations asserting patent claims or defending against claims rather than economic ones."

That leaves us with an industry dominated a handful of giants and a mob of minnows on which the giants feed. The consumer pays for all this in high prices and a lack of real competition or innovation.

Isn't the world of monopoly grand!