Forgent Networks has claimed for some years to own a patent covering JPEG compression. Those it sued generally concluded that it was cheaper to pay than to defend their right, although for several years the patent has been challenged as involving prior art. The Patent office agreed to review the case last winter but the process is a long one. Seeing the end of this gravy train, Forgent has now settled the last of its claims for $8 million. Forgent had about 60 license deals worth $100 million in royalties. (Links include news.com, techdirt, techdirt, and techdirt)

This case makes it pretty clear that our patent system is busted.

A British research organization, the Institute for Public Policy Research (IPPR), is pushing for a change in British law so that it reflects widespread current practice in copying music and videos from one format to another, as from their iPod to their computer or MP3 player. Such a "private right to copy" for individual use by people who have bought the material makes sense as long as they don't transfer it to others. (For a good discussion of the pros and cons see this yahoo news link.)

There doesn't seem much chance that the right will be enacted, but its nice to have someone on the side of reason.

Mike at techdirt (link here but see also here and this) reports that a Motion Picture Association of America (MPAA) member sued a man, claiming he had shared a movie through a file sharing website and thus violated its copyright. The man fought the case, despite the potential cost far exceeding the amount sought for settlement. He owned the DVD of the movie and claimed he hadn't shared or downloaded it. In court the plaintiff so far hasn't been able to show it owns the copyright or that it isn't faulty. The case may be dismissed on a technicality but the basic question of fact seems to be whether the man had violated anybody's copyright. Case pending but what a waste.

Two stories today provide more details on the purge of copyrighted material appearing on YouTube (link here and here).

It now seems that the vanished material is taken down at the request of the copyright owner and that the items chosen follow some idiosyncratic criteria that only it knows. Some owners of TV videos, however, face a quandary. The Post describes their dilemma: the web “could siphon off their TV audiences and ad dollars or [provide] a powerful promotion machine that could generate buzz for the shows.”

The New York Times has an editorial today severely criticizing the American patent system (link to NY Time article). It is short, so here is the whole thing.

Pay to Obey

The broken American patent system has a knack for sanctioning the ridiculous. In the latest example, businesses are receiving patents for devising ways to obey the law the tax code, to be more specific. What's next, a patented murder defense?

As Floyd Norris reported recently in The Times, the broad category known as business-method patents (like patenting the idea of pizza delivery rather than the pizza itself) has expanded once again. Now it includes the legal ways that accountants and lawyers help their clients pay less tax.

Once the Patent and Trademark Office has granted one of these patents, everyone who uses the same legal shelter even if they draw the conclusion based on their own interpretation of the tax code will be subject to lawsuits and even injunctions against using the method at all.

Defenders of these tax-strategy patents argue that they won't affect the average person's struggle with the 1040 form each April. The easy stuff should be rejected under the usual standard that requires patents to be novel and not obvious. Tax-strategy patents, they argue, are more geared toward the complicated tax returns of rich people.

While we don't normally rush to make it easier for the rich to pay less tax, the precedent is a bad one. People should be treated the same under the law, and shouldn't have to pay a licensing fee for the privilege. Congress needs to make spurious patents easier to challenge across the board, and should consider clarifying what may be patented. Recent technological advances raise questions about how patents apply to genes and life forms, or what standard should cover old business models on the Internet.

Patents are supposed to encourage innovation, rewarding the individual for the greater good of society. But excessive or overly broad patents can slow business activity to the pace of cold molasses. And we sure don't need something else to worry about on tax day."

YouTube, the website that allows individuals to post videos, is in the process of being purchased by Google. In preparation, it has begun taking down copyrighted videos from TV shows like Comedy Central and Howard Stern (link here). "A week earlier, nearly 30,000 clips of TV shows, movies and music videos were taken down after the Japanese Society for Rights of Authors, Composers and Publishers cited copyright infringement," according to the article.

The US take-downs were reported to be at the request of a third-party, presumeably a TV advertiser which paid for the show but gets little or no credit on YouTube. I wonder whether they would withdraw their objections if YouTube included the ads at no direct cost to the advertiser.

The New Economist blog questions whether textbook prices charged by Amazon in the US are a ripoff. It reports that the same texts are considerably cheaper in the UK. American buyers can save too, by ordering there, even after paying expensive postage (link to new economist.)

The blog is based in turn on a careful study which finds that books for general audiences seem to be competitively priced across countries, but texts are not, as measured by prices at amazon.com and amazon.co.uk. (The study can be found at here) It concludes, “The average hardcover textbook price is roughly 50% higher in the United States than in the United Kingdom, and in some cases the US price is as much as double the UK price. This is counter to the conventional wisdom that consumer goods are cheaper in the US than in Europe. We argue that cost factors cannot explain differentials of this magnitude, hence price differences are almost exclusively demand-driven. We discuss several explanations for why demand may differ across countries. We also discuss why price differentials have persisted in the internet era and speculate on whether this is likely to continue."

The study further elaborates: "Differences in the college education culture in the two countries may ultimately be the most likely explanation for textbooks price differences. In the United States the textbook is an integral part of college education. In most courses instruction centers around a single textbook that covers most of the material and includes exercises and practice problems. The textbook is the main reference for students and it is usually labeled as "required" for the course. In the UK, textbooks are not used in the same way. Students are usually given a list of books that are meant to be study aids rather than mandatory textbooks. Thus students feel much less of an obligation to buy particular books, meaning that willingness to pay for textbooks is lower than in the United States. We feel that the central role of the textbook in US college instruction may be the primary source of price differentials."

(hattip slashdot). Some of you may be familiar with a science fiction television show "firefly," cancelled despite a small cult following, later made into a movie, entitled "serenity." Universal studios in an effort to promote the movie encouraged fans to market the movie by

[creating] a community [the browncoats] around the release of Serenity that harnessed the power of a large member base that exceeded the most optimistic of expectations. Members were encouraged to form regional groups to promote the film and perform activities that would help generate word of mouth, like creating bumper stickers and gift cards to accompany the DVD release. (beaffinitive)

Can you predict what happened next?

With the shutting down of Blue Sun Shirts at the behest of FOX, cease and desist letters going out to owners of Browncoat shops on CafePress, at least one fan-favorite promoter receiving a demand from Universal Studios Licensing LLC for nearly $9,000 in retroactive licensing fees, and the resulting chilling effect leading to other fans shutting down preemptively many Browncoats got to thinking about just how many hours they spent on helping to market and promote Serenity, in essence with the tacit agreement of Universal Pictures, if not their outright official encouragement. (browncoatinvoice.com)

File under "imitating the RIAA - how to win the heart and minds of your fans - sue them"

The US Supreme Court will hear an appeal in a dispute between Microsoft and AT&T over Windows programs sold overseas which use an AT&T patent on speech coding technology (yahoo news link here). An appeals court had extended US patent protection abroad and would cost MS an estimated billion dollars. The patent had already been ruled valid for software sold in the US.

The Justice Department sided with MS, arguing that AT&T should seek its remedy in foreign courts where it has a valid patent. Congress had previously extended the reach of US patents to commerce abroad after the Supreme Court ruled against it.

This looks like another opportunity for the court to overrule the Congress. If so, and given its conservative tinge, the the grounds will be interesting.

Wikipedia proposes a new tactic, buying up desired copyrights and making them freely available (yahoo news lnk here). Wikipedia Foundation members are being asked what material they would like to see freed. In a letter to members, it is suggested that a funder may be available.

Interesting idea. Utopian?