Against Monopoly

defending the right to innovate

Blocking Technology

Monopoly corrupts. Absolute monopoly corrupts absolutely.

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Patent Trolls

(via Steve Silberstein) One of the reason the patent system does not work more poorly than it does is that companies acquire large portfolios of patents that they hold over each others head, effectively neutralizing the patent system and letting everyone get on with the business of actually inventing useful stuff. The "patent trolls" or non-practicing entities (NPEs) have broken this system by creating firms that don't actually do anything except hold patents, so they are free to sue, without any threat of being counter sued. Patent Freedom is a web site devoted to tracking the trolls - they have a wealth of interesting information about them.

Free the Airwaves

What is the next great wave of innovations? It is hard to know for sure, but over-the-air internet seems an obvious possibility. We observe the following facts

*Cell phone service is highly monopolistic and lousy.

*Over-the-air internet service has arrived - watch people with their iphones at the restaurant...

*Over-the-air internet service is lousy - watch how long it takes them to load a web page

This raises the question: what would really good over-the-air internet service do? Really high speed all the time everywhere over-the-air internet exists in laboratories all over the world. It is directional and frequency hopping and it cleverly gets around problems of interference, including that caused by other devices. The technology is there now. Why can't we have all the information in the world at our fingertips all the time? Think of all the great business opportunities - from revolutionizing markets for small businesses, to great new businesses, to the business of writing the software, building the small portable internet devices, to building the large radio networks needed to make the vision a reality. Expensive proprietary over-the-air networks revolutionized trucking and shipping. Why not revolutionize everything else? There is no question that there is huge opportunity here: for individual people to make their fortune, for the more average of us to make a living in a new and growing industry.

So what is keeping the vision from reality? Not enough support from the government? No - government is the problem. From dragging their feet on the allocation of "white space" spectrum, to delaying the introduction of HDTV, to the more fundamental problem of tying up massive amount of bandwidth with obsolete over the air television that provides minuscule benefits to practically nobody - government regulation is the culprit. We don't need "net neutrality" laws; we don't need government regulation of the airwaves - we need competition, hard and fierce and innovative.

And let us not forget patents and copyright. So much of the new technology is tied up with patents of course. But I'm especially reminded of a conversation I had with Gary Shapiro, President of the Consumer Electronic Association, who I met at a Cato conference several years ago. He represents mostly smaller electronics firms - exactly the ones who are eager to innovate and bring new products to market. What is their greatest fear? That competitors will steal their ideas if they don't tie them up with patents? Of course not. It is that they will be sued by copyright holders for somehow encouraging piracy. If you want to know what that is all about, go look up the case of Replay TV.

Finally - what does it take to succeed? The biggest success of the last decade is Google. Did they do this by trying to squelch the competition with legal means? No. They have a vision - all information at your fingertips all the time - and they've ruthlessly pursued that vision, necessarily bending and breaking copyright laws along the way. So...do we spend our time patenting elaborate business models? Or do we build better mousetraps?

I think it is time to start a campaign to free the airwaves. The time has come for inexpensive high quality access to everyone and everything all the time.

Google Copyright

Glenn Thorpe brings to our attention an article by Matt Zimmerman about the Google settlement with the book authors. He points out that until now Google has pursued legal settlements that benefited everyone; this time the settlement benefits only them, leaving anyone else who would like to make fair use of copyright material in the lurch.

We argue a lot about patents on this blog. While software patents are pretty clearly harmful, for the most part they aren't enforced so don't make much difference. The big blockade to innovation these days seems to be the copyright tail wagging our dog.


via Svetoslav Trochev

Here is prime example that shows how the patents are 'promoting' the progress.

I guess the new BMW will have new option. "Paper map for North America"! :))

More Patent Abuse

Thanks to Christian Zimmermann for keeping an eye on Economic Logic. They are blogging up a storm over patent abuse.

SCO as a Troll

One of the biggest problems with the patent system - and to a lesser extent with copyright - is the use to try to tax other people's innovations by claiming a monopoly over something you didn't invent. This is the heart of what it means to be a patent troll (see the article below about banks), and why it blocks rather than promotes innovation. There is a nice posting about SCO on Economic Logic: the point is that SCO now exists as a company the sole purpose of which is to slow down progress by claiming IP rights over other people's inventions and creations.

Obstructing Innovation in the Name of Promoting It

Of all the arguments for IP, the argument that somehow existing inventions can be diffused more quickly if only someone has a monopoly over them is the one that has the least theoretical or empirical support. But the mere absence of facts is no bar to making the argument. Via Stefano Trento, here is an entire manual devoted to that proposition. To quote "It is well established that intellectual property advances product development because intellectual property provides incentives for R&D, commercialization, and product distribution." This is, of course, not well established, and while it is true that IP provides some incentives and disincentives for R&D, it is almost certainly not true that it provides incentives for commercialization and product distribution.

Non-compete Agreements

It isn't widely recognized, but a variety of private contracts have implications similar to government mandated "intellectual property." One of the most significant things is the enforcement by goverment of non-compete clauses. This makes it impossible for employees to leave a firm to work for a rival or start their own firm in competition with their employer. As with most anti-competitive contracts, this is popular with would-be monopolists, but the consequent lack of competition is not especially good for innovation. There is a literature that suggests that Silicon Valley became...well Silicon Valley... and Route 128 in Boston became not much of anything despite Route 128 having the same starting conditions of computer firms and strong universities as Silicon Valley because Massachusetts enforces non-compete agreements, and California will not. If you want to find out more about this the ever valuable Mike Masnick has done a nice job of digging into some of the literature and details.

More Amazon one-click

This story

By changing the word 'a' to 'the' and adding the phrase 'purchasable through a shopping cart model,' lawyers for Amazon.com have apparently managed to reinstate two of CEO Jeff Bezos' 1-Click Patent claims that were rejected a month earlier. 'Patent Owner's Rep was informed that the proposed addition to the claims appear to place the claims in condition of patentability,' writes the USPTO in its Ex Parte Reexamination Interview Summary of the 11-15 conference call that was held with five representatives of the USPTO and patent reformer Amazon.

from Slashdot wasn't the most promising start of Thanksgiving. But appearances can be deceiving. Peter Calveley, the New Zealander who filed the patent challenge (with our support I might add), writes in to call attention to a post on his blog explaining why this is defeat for Amazon - or what is more salient, victory for the rest of us. The key point is the blocking technology point. Amazon's original claims were so broad they blocked the use of one-click for practically anything to do with making a purchase. The revised claims are specifically in the context of the shopping cart model - Peter points out that in the future innovation in payments systems will not be in the context of a shopping cart model.

Patent Trolls in the News

I have some vague recollection of a top Microsoft executive leaving to join an IP firm...this appears to have some details. The next move in the ballet was predictable

Patent Infringement Lawsuit Filed Against Red Hat & Novell - Just Like Ballmer Predicted

I don't suppose it requires a conspiracy theorist to see Microsoft as spinning off a subsidiary to spread legal FUD against competitors. Of course you might think the patent has some merit. Ars Technica has a rather nice summary the last time the patent was used in a lawsuit

The language of the patent is interminably vague and could apply to any one of a dozen different user interface elements that are found in all modern operating systems, but seems to be most closely related to the idea of "tabbed" dialog boxes, like the ones seen in both Windows and Mac OS X. Ironically, the company to first release a modern-looking tabbed dialog box was none other than Microsoft with early versions of Office, although Apple had a Control Panel with similar functionality as early as Mac OS System 4.2, circa 1987. It remains to be seen whether or not IP Innovations will go after Microsoft and other system vendors after they are finished with Apple.

The dead hand of Xerox reaches out from the grave...

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