The BBC reports about a drug that was available cheaply, got tweaked in a minor way and now available only in a much more expensive format. While the story is not about patenting, it is very similar to it as it is about licensing a drug, in this case for use in the UK, and excluding the old, yet still perfectly effective, drug from use. This is exactly what a patent does, and there are countless examples of pharmaceutical companies doing exactly these very marginal improvements to extract major rents from sick people.

Felix Salmon poses the question, "Can you patent financial innovations?" And answers, "no"---link here and link here.

His timely example of such a patent application is a company which makes deals with housebuyers to pay a 10% bonus on the value of the loan when it is paid off if the borrower has met all his obligations on time. Time magazine put the model on its list of the 50 Best Inventions of 2010 link here. Salmon thinks this is a neat idea because it would create an additional incentive not to walk away from an underwater mortgage.

But there is that problem of trying to patent a business model. Moreover, it is not clear to me how this model would work. The company making the offer would have to add its margin on to the market interest rate and who would borrow on those terms? In short, this story needs a lot more explanation to be credible. Moreover, the company pushing the idea has invested a lot in promoting it, raising more questions.

Stewart Baker over at Volokh.com wonders why most libertarians have laid down when it comes to their willingness to tolerate the current copyright regime:

Conservatives and especially libertarians seem like a cheap date on this issue. You'd think libertarians would have been in the forefront of objecting to governmental intrusions into our lives at the behest of a special interest let alone the creation of a new class of quasicriminals, defined as more or less everyone who entered high school after 1996, who can be investigated and prosecuted whenever the government or some member of industry decides that they are too troublesome.

But no. For a lot of libertarians, judging by the comments to David's post, all the RIAA has to do is call its new government-created entitlement a form of property, and, presto bingo, it's sacrosanct.

Come to think of it, maybe I can persuade readers here that TSA's new enhanced security measures are just fine as long as we enforce the rules by giving all the passengers on the plane a "property" right not to travel with people who refuse body imaging and enhanced patdowns. Instead of relying on oppressive government regulation, we'd just let the passengers collect millions in "statutory damages" from noncompliant travelers.

Read the full context of his thoughts here:

http://volokh.com/2010/11/20/girl-talk-and-intellectual-property/

Mike Konczal examines whether the burden of government regulation has gotten worse, sees that in aggregate it has, and then digs down to find that it is due almost entirely to the activities of Homeland Security link here. Irrelevant for a blog on IP you will say. But wait.

In the end he notes that "One of the biggest winners over the past 9 years was the Patent and Trademark Office, which went from 6,128 employees to 10,098 employees." His comment on that: "Given how much patents are used to shut down competition and let the largest companies rent-seek, this is probably the anti-growth part I would flag. For those who know it better, is it a symptom of court decisions? Are they playing catch-up to industry demands?"

In an otherwise interesting article, the Economist ended a story on the Chinese government's campaign to produce more innovations and resulting patents with this, "If ideas are protected, Chinese people will produce more of them" link here.

Yet the rest of the article doesn't really support that conclusion. People are obtaining lots of patents, issued only since 1985, but whether they are innovations worthy of a patent remains open to question. It turns out there are two kinds of patent, a sort that requires a determination of novelty and is good for 20 years and the other, a finding of utility and good for only 10 years. The latter are far more numerous.

The other part of the story is that the government is pushing hard for more patents, offering incentives like academic tenure, residence permits in desirable cities, company bonuses, etc. The incentive effect has been obvious, in the rise of patent creating companies that sell their products on the basis of such collateral rewards. But I wouldn't sell the Chinese short over the longer run. They do respond to market incentives.

China's patent system is likely to be a problem for foreign companies which want to sell or invest there. From experience in other countries which were sticky about honoring foreign patents, until they have a substantial portfolio of their own IP, that of other countries tends to honored only sporadically and minimally.

Monopolies and the internet are the subject of articles by kdawson at Slashdot link here and Tim Wu at the Wall Street Journal link here. They note that the monopolies are innovative, but that they will not always remain so.

Actually, they are not real monopolies, but rather collectively they make up an oligopoly where the companies compete at the margins, mainly in the form of product differentiation, They are successful as long as they innovate. Why would they not continue to do so? On first thought, because they run out of innovations. But is that likely?

I don't think so. The problem here is that further innovation gets blocked by patents and copyrights so that big companies like Apple and Microsoft use their intellectual property to ward off new competitors by building an IP fence. There is competition now and it will continue so long as the industry can continue to innovate. When innovation stops, the oligopolists will be in full control and the need to do something about the industry's IP will become pressing.

Politically, it seems hard to do anything about this IP so long as innovation continues and the industry can argue it is constantly in flux. So far, the big players have been right.

David Post over at Volokh.com has a must read concerning the latest attempt by Congress to restrict the way the Internet operates in order to protect Big-IP.

As he explains:

It's awful on many fronts. It would allow a court to effectively shut down a site operated out of Brazil, or France, without any adversary hearing (unless, I suppose, "the domain name" itself comes into court to argue the case) or any reasoned determination that the site actually is engaged in unlawful activity. There is a name for that in our law: "prior restraint," and we don't like them even in cases where truly compelling governmental interests are at stake, let alone where the purpose is merely to protect the rights of copyright and trademark owners.

Check out the full details here:

http://volokh.com/2010/11/13/once-again-the-copyrighttrademark-tail-tries-to-wag-the-internet-dog/

[Update] Popular Instapundit blogger Glenn Reynolds writes: "If I have to choose between getting rid of copyright and getting rid of free speech, I'll say goodbye to copyright. The folks at Big Content, and their shills like Leahy, seem to want to make me choose."

Is there no technology so good that "patent holders" don't want to block it? This is why I hate IP. If they had patents when the agricultural revolution hit, we'd still be hunter-gatherers.

Screwball uses of the patent and copyright system are occurring with increasing frequency both at home and abroad. Here is today's link here. The South Korean Army has applied for a patent on "the camouflage pattern on its newly developed combat fatigue, which would ban unauthorized use and sales of the same-patterned civilian attires and accessories. The military has been developing the new combat uniform since 2008. It will be distributed from next July to replace the current uniform within three years." The army with its political clout in the South has every reason to believe the patent will be granted.

The article suggests the reason for a patent is national security, that is to prevent "unauthorized use", say by North Koreans dressing attacking forces to confuse the southerners. I didn't think a southern law would restrain the northerners copying, if they really wanted to try to confuse an enemy, even at the risk of confusing their own side. Miracles will never cease.