Against Monopoly

defending the right to innovate

Against Monopoly

Monopoly corrupts. Absolute monopoly corrupts absolutely.

Copyright Notice: We don't think much of copyright, so you can do what you want with the content on this blog. Of course we are hungry for publicity, so we would be pleased if you avoided plagiarism and gave us credit for what we have written. We encourage you not to impose copyright restrictions on your "derivative" works, but we won't try to stop you. For the legally or statist minded, you can consider yourself subject to a Creative Commons Attribution License.

Using (and Abusing) Trademarks In An Attempt To Monopolize The English Language

"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]:


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


The Hypocrisy of State Collusion

Recent headlines speak volumes about the hypocrisy of the state. On the one hand, we have state persecution of private firms for collusion, price-fixing, monopolization, etc., e.g. LG, Sharp plead guilty to LCD price-fixing, take $585m fine; antitrust actions against Microsoft, both in the US and Europe (EU hits Microsoft with record 899 million euro antitrust fine); and as I noted in The Schizo Feds: Patent Monopolies and the FTC, the state grants patent monopolies and then uses antitrust law to attack the beneficiaries of those monopolies.

And on the other hand, we have state monopoly-granting patent office collusion: Blueprint Laid Out for Work-Sharing Among Five Intellectual Property Offices, reporting that "The United States Patent and Trademark Office (USPTO) announced the development of a blueprint for work sharing among five major intellectual property offices (IP5) to address the common challenges they are currently facing. The heads of the IP5 met at Jeju, Korea, on October 27 and 28, 2008, to discuss a shared vision for work sharing and collaboration."

And we have the G20 nations colluding ("US President George W. Bush said Thursday that world leaders will 'lay the foundation for reforms' at global economic crisis talks this week...."), not to mention "coordination" by the world's central banks (Fed, European Banks Coordinate Interest Rate Cut; Central Banks Coordinate Global Cut in Interest Rates; EU Leaders Vow to Coordinate Response to Finance Crisis).

Utter hypocrisy--and, as usual, exactly backwards: the state outlaws private "collusion" while engaging in global collusion itself, when, as Rothbard shows, only states are able to form genuine monopolies in the first place. (See Man, Economy, and State, ch. 10; also Hoppe, A Theory of Socialism and Capitalism, ch. 9.)

Against Monopoly

In reading Robert Pear's excellent article in today's New York Times Business Section documenting the sheer waste associated with patent-oriented rent-seeking by Big Pharma in its lobbying over Congress's current round of attempted patent reform, I was struct by this sequence of quotes and comments on the disagreement between companies that rely on patents and those that don't regarding the proposed reforms of the inequitable conduct doctrine, which allows the courts to invalidate a patent if it is demonstrated that the patentee deliberately withheld or distorted information in the patent application process:

Mr. Armitage, the Lilly executive, said: "The doctrine of inequitable conduct is used so aggressively in litigation that it has unintended consequences. Applicants give the Patent and Trademark Office too much information, to avoid allegations that they concealed anything, and they refuse to explain the information, to avoid later allegations that they engaged in some form of misrepresentation."

James C. Greenwood, president of the Biotechnology Industry Organization, said, "The poor patent examiner gets a dump truck full of information that he has to pore over without any assistance from the applicant."

The number of patent applications 467,243 in 2007 has nearly doubled in the last 10 years and has more than tripled since 1987.

Jon W. Dudas, the under secretary of commerce for intellectual property, said: "We are getting more and more unpatentable ideas, worse and worse quality applications. Historically, in the last 40 years, the allowance rate the percentage of applications ultimately approved hovered around 62 percent to 72 percent. It went up to 72 percent in 2000, but dropped to 43 percent in the first quarter of this year."

On reading this, I started to wonder if anyone had thought about possible open source methods for reviewing patent applications, and, lo and behold, this is something the USPTO is apparently considering. Link here.

More on the Patent office court decision

Following up on Stephen Spear's post on the District judge's ruling against the attempts by the U.S. Patent Office to reign in firms trying to apply for large numbers of patents at once -

The full court decision can be found here [PDF file]. [h/t: CourtHouseNews.com]

While the ruling contains a lot of legalese, the judge also manages to describe in great detail (and relatively simple language) the process involved in patent applications - and why the current system allows firms with large financial and legal resources to get away with murder in the patent realm by being able to outlast the patent office and wear it down. Definitely worth a read.

The end results of the ruling are indeed tragic. However, I have to admit that the judge may have a point when he says that the proposed changes need to come form Congress itself - not from the whims of unelected and unaccountable administrative officials (even though these particular whims are very much welcome). If you give too much lawmaking power to administrators, the day will come when the pendulum swings the other way after pro-monopolist workers come to dominate the Patent Office. But since Congress is frequently bought off by the patent lobby, that leaves the future landscape rather bleak. Hopefully the Supreme Court will continue its attempts at patent reform by enlarging the very incremental steps they have undertook thus far.

88% of Patents Challenged Through Litigation Re-Examination Process Found To Be Invalid

Astounding...but not at all surprising.

Patent litigation probably couldn't get more high stakes than a Delaware lawsuit currently unfolding against Intel Corp. Transmeta Corp. has accused the Silicon Valley chip giant of infringing on 10 patents in its hugely successful Pentium products.

Yet rather than battle it out in court, Intel is trying to put the brakes on the proceedings. The company is making use of a relatively new government process, known as inter partes re-examination, that is becoming an increasingly popular way for accused infringers to get patents invalidated. It's far less costly than litigation, and even if the patent is upheld, a stall in court proceedings increases the likelihood of a settlement, patent attorneys say.

Since the inter partes procedure started in 1999, the yearly number of these requests has increased dramatically, and U.S. Patent and Trademark Office statistics show the process is likely to result in the invalidation of patents at issue. In 2006 there were 70 requests, and six months into this year, there have already been 90.

And of the inter partes re-exams that have been completed, the patent claims were invalidated 88 percent of the time, according to the PTO.

Read more about it here.

The China "IP" Ripoff

In today's Wall Street Journal Business World column, "Yes Logo", Holman Jenkins, Jr. writes that China's disregard of "intellectual property," such as trademarks, will cause firms to underinvest in "reputation" (his parentheses) and quality "and won't take place if they can be freely expropriated by knock-off artists."

Mr. Jenkins adduces not one iota of evidence for this remarkable claim, and ignores the fact that software firms such as Microsoft and many others continue to invest billions in producing new products and brand building. Could it be that they earn much more than their cost of capital even in the face of the rip-off artists thanks to their first mover advantages and ability to sell complementary services, not to mention their already strong postions in the market, strong brands, etc.?

So who needs intellectual property?

Introducing Your New Guest Blogger

Thanks to David K. Levine (no relation to me) and the rest of the gang here at Againstmonopoly.org for inviting me on as a guest blogger.

Brief background about myself: I produce a radio show in Los Angeles. I am also a licensed attorney who still occasionally dabbles in law on the side (mainly in defamation defense - but also with some experience in copyright infringement defense). Before that, I worked in film and television post-production which helped to form my views that current IP schemes overburden artists and stifle creativity.

I have previously guest blogged for other sites, including: Patterico.com, The Southern California Law Blog, and Calblog.com. I still occasionally guest blog for the first two sites listed, but I thought it best to bring over my posts about IP to this site for the sake of thematic consistency within blogs. If you still have an interest in other areas of law and/or media bias - feel free to check out those sites as well.

I have previously written a series of posts concerning IP entitled The Tyranny of Copyright Law, The Tyranny of Trademark Law, The Tyranny of Patent Law, and the (somewhat related) Coming Legal Superstorm Against Bloggers. [Each post is a multi-part series that is often spread out over multiple blog sites. Click on the links and they will provide further links to other parts of the respective series.]

I welcome all feedback and debate regarding my posts and the ideas that are generally put forth by this site. I know that many readers of the other blogs I have written for have a difficult time accepting the difference between real (tangible) property and so-called intellectual property. They would often roast me over the coals in their comments with delightfully amusing abuse. I hope that they will follow me over to this site on occasion to continue it (and in that process, hopefully become exposed to some new ideas that will change their thinking over time).


Against Monopoly

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."


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James Boyle's new book with his congenial IP views free to download

French firm has patents on using computers to choose medical treatment 1

French firm has patents on using computers to choose medical treatment 1

French firm has patents on using computers to choose medical treatment 1

French firm has patents on using computers to choose medical treatment 1

French firm has patents on using computers to choose medical treatment 1

French firm has patents on using computers to choose medical treatment 1

French firm has patents on using computers to choose medical treatment 1

French firm has patents on using computers to choose medical treatment 1

French firm has patents on using computers to choose medical treatment 1

French firm has patents on using computers to choose medical treatment 1

French firm has patents on using computers to choose medical treatment 1

French firm has patents on using computers to choose medical treatment 1

French firm has patents on using computers to choose medical treatment 1

French firm has patents on using computers to choose medical treatment 1

French firm has patents on using computers to choose medical treatment 1

French firm has patents on using computers to choose medical treatment 1

French firm has patents on using computers to choose medical treatment 1

French firm has patents on using computers to choose medical treatment 1

Copyright batte over 'unauthorized' Catcher in the Rye commentary 1