My latest contribution on intellectual monopooly is "Slave Labor and Intellectual Property."

Cop:You're under arrest!

Victim: What for?

Cop: Its a secret. I can't tell you.

This is America?

That is the Patriot Act, parts of which were about to expire but were just renewed for 4 years with almost no debate. For links on this, start here and here and here

Senators Ron Wyden (D-Ore) and Morris Udall (D-Col) have been highly critical of the extended parts which they believe have been interpreted by the security folks in a way that conflicts and extends the generally understood interpretation of the law.

Wyden had put a hold on the bill but then removed it on the promise of hearings that would allow him to pursue his doubts on the law (while not jeopardizing U S security).

This is the same law that has been interpreted to allow the Justice Department to seize internet service providers and close them without a public process or explanation, ostensibly for violating copyright - hardly a security priority.

Rand Paul has also picked this legislation for criticism, but mainly on libertarian grounds with which many people disagree. Others are critical on civil rights and due process grounds.

All opposition on this one is welcome. It is an outrage.

Kimberly-Clark executives might need to start using their own products, based on their potential reactions to this news as reported by CourtHouseNews.com -

"Huggies" manufacturer Kimberly-Clark Worldwide must answer an allegation that it knowingly used invalid patents to monopolize the market for disposable baby diapers.

In March 2009, the company sued First Quality Baby Products, a "private label" diaper-seller producing Wal-Mart- and Walgreen's-branded diapers, claiming First Quality's products infringed on Kimberly-Clark's patents.

In April 2009, First Quality fired back with counterclaims, accusing Kimberly-Clark of trying to enforce invalid patents.

"First Quality alleges that KC [Kimberly-Clark Worldwide] uses its patents to disrupt competitors and to maintain a monopoly in the disposable baby diaper and training pants market. KC first threatens a patent lawsuit and then engages in sham litigation to drain the resources of private label manufacturers, thereby reducing the ability of private labelers to compete," U.S. District Judge William Caldwell wrote in a 12-page opinion denying Kimberly-Clark's motion to dismiss the counterclaims.

Read the full story here: http://www.courthousenews.com/2011/05/19/36704.htm


Then read the full [PDF] court ruling here:

http://www.courthousenews.com/2011/05/19/diaperopinion.pdf

In reference to page 2 of the court's opinion: Did you know that 300 patents were apparently needed to manufacture disposable diapers? Neither did I...

A paper Peter J. Huckfeldt and Christopher R. Knittel examining generic entry. Not a great advertisement for patents:

We study the effects of generic entry on prices and utilization using both event study models that exploit the differential timing of generic entry across drug molecules and cast studies. Our analysis examines drugs treating hypertension, high blood pressure, type 2 diabetes, and depression using price and utilization data from the Medical Expenditure Panel Survey. We find that utilization of drug molecules starts decreasing in the two years prior to generic entry and continues to decrease in the years following generic entry, despite decreases in prices offered by generic versions of a drug. This decrease coincides with the market entry and increased utilization of branded reformulations of a drug going off patent. We show case study evidence that utilization patterns coincide with changes in marketing by branded drug manufacturers. While the reformulations---often extended-release versions of the patent-expiring drug---offer potential health benefits, the FDA does not require evidence that the reformulations are improvements over the previous drug in order to grant a patent. Indeed, in a number of experiments comparing the efficacies of the patent-expiring and reformulated drugs do not find statistical differences in health outcomes calling into question the patent-extension policy.

The Economist ran an editorial last week that promoted innovation and jobs by fixing the patent review backlog with more money link here.

In response, David and I submitted the following letter to the editor:

"The assumption of your editorial (Patently Absurd, May 5) that patents foster innovation is wrong. All the constantly growing evidence shows that patents hurt rather than help innovation. To be sure, in the US patents are required by law to be original, useful, and not obvious. When hundreds of thousands are being issued each year, that beggars credibility. Instead, the patent system fosters endless efforts to hijack the profits of successful innovators, generates endless time consuming costly litigation and worse, leads to monopolization with the concomitant expensive products - and indeed discourages real innovators.

"This isn't merely a matter of theory, nor yet one of empirical studies - although both are in plentiful supply: you might take a look at the many references in Against Intellectual Monopoly by Boldrin and Levine. But more to the point: why don't you talk to engineers and venture capitalists - or even patent examiners? Or at least read the comments they left on your website? You will find that they too view patents as time-wasting defensive operations that provide little protection to real innovators and instead serve merely to protect entrenched monopolists and encourage patent trolls. You are right that the present patent system is broken, but your proposed cures will only make matters worse."

"By definition, intellectual property includes the words, images, and sounds that we use to communicate, and the courts are strongly admonished not to 'indulge in the facile assumption that one can forbid particular words without also running a substantial risk of suppressing ideas in the process'."

Wise words indeed. They come courtesy of the Honorable Paul L. Maloney, a U.S. District Judge in Michigan who wrote the above line (partially quoting previous cases) in conjunction with this trademark dispute here [PDF link]:

http://ia600305.us.archive.org/26/items/gov.uscourts.miwd.65061/gov.uscourts.miwd.65061.46.0.pdf


Unfortunately, large segments of the IP legal community haven't gotten the message. Witness this recently filed case here [PDF link]:

http://www.courthousenews.com/2011/05/12/Media.pdf

Adobe Systems bought Macromedia to remove its competitor FreeHand from the professional graphic illustration market, and to force users to switch to Adobe's more expensive, and inferior, Illustrator software, graphic designers say in a federal antitrust class action.

More details via CourthouseNews.com here:

http://www.courthousenews.com/2011/05/05/36356.htm

Via CourthouseNews.com:

"Attorneys offered competing explanations of how major record labels view file-sharing software as opening arguments kicked off the damages trial against former LimeWire CEO Mark Gorton on Wednesday.

...

The eight-person jury listening to opening arguments on Wednesday afternoon will not determine whether LimeWire's peer-to-peer file-sharing is illegal; a judge already determined that it was in May 2010.

Instead, jurors will decide how much Gorton owes the labels in damages."

Courthouse News has more details in their coverage here:

http://www.courthousenews.com/2011/05/05/36369.htm

The Americans are trying to force ACTA - think super-DMCA - down the throat of Europe. While it's been watered down a bit, it's still quite obnoxious, and almost bound to choke off innovation. Via Hinnerk Gnutzmann a group of European academics, largely lawyers, has a petition against the current form of the ACTA. It's quite a moderate document - it conceded the basic usefulness of ACTA, which I view as very counterproductive - but still represents a step in the right direction. If I were a European academic I would sign it.

As do Joel and his coauthors. I've long wondered about the role of "mechanics" and other tinkerers - if you ask me why not the industrial revolution in Rome my answer would be: not enough of the low level tinkerers needed to make technology take off. I'm glad to see some careful research into this.

The Rate and Direction of Invention in the British Industrial Revolution: Incentives and Institutions by Ralf Meisenzahl, Joel Mokyr

Abstract:

During the Industrial Revolution technological progress and innovation became the main drivers of economic growth. But why was Britain the technological leader? We argue that one hitherto little recognized British advantage was the supply of highly skilled, mechanically able craftsmen who were able to adapt, implement, improve, and tweak new technologies and who provided the micro inventions necessary to make macro inventions highly productive and remunerative. Using a sample of 759 of these mechanics and engineers, we study the incentives and institutions that facilitated the high rate of inventive activity during the Industrial Revolution. First, apprenticeship was the dominant form of skill formation. Formal education played only a minor role. Second, many skilled workmen relied on secrecy and first-mover advantages to reap the benefits of their innovations. Over 40 percent of the sample here never took out a patent. Third, skilled workmen in Britain often published their work and engaged in debates over contemporary technological and social questions. In short, they were affected by the Enlightenment culture. Finally, patterns differ for the textile sector; therefore, any inferences from textiles about the whole economy are likely to be misleading.

Also only a paywall copy.