Fear of a government crackdown does drive policy as we see in this story, Google Makes a Case That It Isn't So Big link here. In fact, Google is huge. The issues are whether that is a danger and whether anything worthwhile can be done about it. To reach any sensible conclusion, one needs to examine the pieces that make up Google.

The preeminent one is search. Google entered the business after many others. It became number one by being better--more flexible, comprehensive and faster--but now has a lock on web ads. It is now the standard for both searchers and advertisers. It is hard to see how that will change.

Its second big success is YouTube and here too Google seems unassailable as a number of competitors have failed to dent its lead. That is based in part on its having become a social network, particularly for its younger users; its size makes it more attractive. But it has some real political power appealing to an older audience, as exemplified most recently by its role in quickly propagating videos of the protests in Iran.

More recently, Google has introduced Gmail and Chrome. Its email service is free but so are others which have the virtue of familiarity for existing users. Its browser apparently has made a dent in Microsoft's Internet Explorer but isn't that great an improvement over others.

To me, the most troubling of Google's ventures is its book scanning service. It is clearly first in the field, has already scanned a huge part of the world's books, both in and out of copyright, and has worked out a deal with publishers and many other copyright holders. Its technology will be hard for others to match on previously undigitized print books. On first look, this seems to be a natural monopoly, so the ramifications of its proposed settlement are enormous. Its existing lead will also give it a very large leg up on distributing new books that are copyrighted and presumably already digitized.

Another public policy response to Google, whose size is so scary and growing, would be to consider breaking up the company into its obvious components. Most seem to me already to be so large that they can survive on their own. Google's great strength besides its financial clout has been its innovation. Would breaking it up destroy that? That is a question worth further thought and investigation.

I wrote here on 6/14 "And once again we come up with the question posed by copyright, giving publishers and owners a claim on an income stream that would not otherwise have existed. There is no clear public benefit from paying them. The owners will provide no service to receive this bonanza. Nor is the public interest protected to achieve the lowest possible price, consistent with providing the service, the marginal cost to the provider." I return to Google today, focusing once more on the proposed settlement (as no doubt I will again as more of the details emerge on the proposed settlement the feds now have under review). This essay was prompted by David Carr, writing in the NYTimes link here.

The dilemma has several aspects. One is the gain from making so much written human effort readily available on the internet, both conveniently and hopefully, at modest cost. Against this is the cost that consumers will have to pay Google for access, the amount of which is still unclear. And the fact that Google will end up with a monopoly at selling access to these books, with the minuscule exception provided by borrowing the copy from a library which provided Google the chance to scan it in the first place.

That monopoly will exist by virtue of the government agreed terms now proposed by Google. No other companies willing to scan and offer public access will be in a position to compete unless they can undercut Google's resale prices and Google has the advantage of first-to-market. Libraries for the most part seem to have got little for providing access--those that provided the books for scanning and their members get free access to the Google files. In the end these institutions were funded by the public through taxes (our money) in the first place, so this seems like a clever move to capture the return from a public investment.

But the deal is still subject to government approval. Will the government try to renegotiate the deal? Hopefully yes. The cost, of course, is the delay is making access publicly available. To me, that is a small price to pay.

As an opponent of copyright, however, I would like to see the whole deal and copyright itself abolished. That is unlikely. How about a deal in which unregistered copyrights beyond five or ten years old, automatically expire. And an expiration date on all other copyrights of ten or twenty years. Not very realistic politically, but unless we find some basis for compromise, I suspect we will get no real welfare-increasing improvements.

More later.

One of the things I get depressed by is the growing spread of IP protections around the world. Here is another one involving South Korea and Russia. "South Korea and Russia have agreed to launch a fast-track patent review process in November to speed up the process of securing intellectual property rights protection for companies and individuals, officials here said Tuesday." link here The story reports a similar fast track procedure for reviewing and granting patents that Korea has with Japan, with the US, Denmark, Britain, and prospectively with Canada and Germany, Ukraine, Belarus, Azerbaijan and Kazakhstan.

Fast-tracking sounds good, like greater efficiency in government, but the downside is that there is no fast track for reversing patents once granted. It provides patent holders with a long stream of monopoly profits and fees from licenses. Never underestimate the power of a big patent troll up against small entrepreneurs and inventors.

The fascination with declaring intellectual efforts as property begins to captivate the developing world. This story comes from Vietnam where "Viet Nam has 2,790 traditional craft villages nationwide, according to the Viet Nam Association of Craft Villages link here. But the number of craft villages which have registered their industrial property rights, I can count on two hands," said association deputy chairman Luu Duy Dan. Fewer "than 100 out of the 800 specialties are protected by intellectual property rights laws like trademark protection, collective brand names and geographical indication protection."

Unfortunately, the Vietnamese government doesn't seem to have thought about how IP has come to be and whether it serves legitimate public interests. Thus, the monopolists continue to try to spread their tentacles.

Is anybody here aware of the website, HarmfulPatents.org link here? It is a new ally in the fight against patent-based monopoly. Mike Masnick gets a hat tip for this one, in his site, link here. HarmfulPatents is run by a doctor-professor at Stanford, Dr. Robert Shafer. He had developed a database on HIV that is used to identify possible treatments. Then he and his university got sued by Advanced Biological Laboratories, a French firm which claims that its patents cover the use of computers to make diagnostic decisions. Stanford settled, but the doctor hasn't, starting the website and asking the patent office to re-examine and invalidate the patents. ABL's settlement with Stanford ends the suit against Dr Shafer and allows not-for-profit use of his database. Final irony in this outrage: the European Patent Office rejected the patents on the grounds they were obvious.

"Too big to fail" was the mantra for the government bailout of the big banks. "Too big" is also the question raised by Google's explosive growth and the settlement it has negotiated with most publishers to sell its scanned out-of-print books in return for a large payment link here. The public policy dilemma is the huge efficiencies of scale that have come to the first entrant. Google's market power has become immense. Can it be reigned in? Is that desirable? The Department of Justice is presumeably looking at these questions as it has asked for more information on the proposed settlement.

Riding a wave of innovation and a flood of investment money, Google emerged as the dominant internet search engine. It has gone on to provide software and on line services that are essentially free, based on advertising revenue and low costs derived from new technology. But without competition, will it remain free?

What about the libraries, only a handful of which have provided the books for Google to scan, and most of which will have to pay to offer their users access to the scanned texts. The participating libraries are mostly university supported, but the tax-supported public libraries will have to pay for access, as will individuals. Given that it is going to have a near-monopoly, what should public policy be on what they can charge?

And once again we come up with the question posed by copyright, giving publishers and owners a claim on an income stream that would not otherwise have existed. There is no clear public benefit from paying them. The owners will provide no service to receive this bonanza. Nor is the public interest protected to achieve the lowest possible price, consistent with providing the service, the marginal cost to the provider.

I don't think I will ever understand how groups with a private interest in an outcome can continue to expect the public to accept the most outrageous arguments for their position. Mike Masnick has been a consistent popper of such arguments, and he has another now on some in the fashion industry who again want to copyright their designs link here. How many inches above or below the knee can a hemline be? Are they going to copyright that? Take the next step. How many inches can a skirt flair? How many pleats? How wide each pleat? How many colors? How high the waistline? I'd love to be the lawyer defending a copyright infringement case in court. Ask the plaintiff what distinguishes his design. How can he answer?

It gets only slightly better when one considers the example of pretty obvious knockoffs. But big-name fashion houses aren't going to produce them. So now we are in the realm low-end fashion. Isn't the copied better off accepting the emulation as what high-end fashion is all about? The design is obviously widely admired. The original must be worth several times what the knockoffs have to sell for. And why worry? The next season will bring a whole new set of fashions. That is the definition of fashion.

Copyrighting fashion is a contradiction in terms. It will kill innovation (and profit) in the industry. Like so much else with intellectual property protection.

Rare good news link here. The Canadian Patent Appeal Board ruled against business method patents in a case involving Amazon's one-click patent. Usually, US patent holders with the support of our federal government are able to muscle other countries into applying similar legal standards.

The ruling included this statement, "since patenting business methods would involve a radical departure from the traditional patent regime, and since the patentability of such methods is a highly contentious matter, clear and unequivocal legislation is required for business methods to be patentable."

The Canadian ruling comes at a time when the US Supreme Court has accepted a case on the same basic question. The Canadian ruling is important for opponents of such patents because it will be harder for the US to rule differently. I do not go into the merits of the patent as it raises all the usual questions about prior art and obviousness to which so many take exception--just not the courts and the patent owners.

The Economist is running a formal debate entitled "Copyright and wrongs; This house believes that existing copyright laws do more harm than good" link here.

Most of us writing here accept the proposition and are opposed to copyright. One part of my mind argues to stick with principle. Another concludes we are slowly seeing the IP rights of the owners expanded. They have the money, the lawyers, and the political allies. We are losing. One way is through the steady accretion of legal complexity. Another is the spread of IP to other countries, with pressure growing on all to conform to some international minimum legal standard. In the meantime, so many consumers have been brainwashed that IP rights are virtues sanctified by the constitution.

Having cried in my beer, I urge you all to view the debate, which is about half over. You can still participate, as well as weighing in here when it suggests ideas worth arguing or passing on.

The Economist has a startling article this week on China's drive to develop patents as part of its development policy and to put it ahead among the world's leading economic powers link here. " The country's patent office leads the world in patent applications, more than 800,000 of which were filed in 2008. ...Most are for "petty" patents: middling technology that undergoes minimal review and receives only a 10-year term....[But] Chinese firms are increasingly filing "invention" patents that are rigorously scrutinized and receive 20 years of protection, as in the West." "Since 2006 more patent lawsuits have been filed in China than anywhere else, even litigious America. Most pit domestic firms against each other, but in recent years foreigners have found themselves on the receiving end too."

For those of us who regard patents as anti-competitive, leading to monopoly, this can only be seen as unwelcome. When intellectual property becomes an arm of the state in international competition, the world's consumers will lose and fights over IP will become sources of international conflict. Such conflicts need a lot more attention than they have been given to date. But attenuating them, much less resolving them, does not seem likely. What goes around comes around.