Felix Salmon link here goes after Andrew Ross Sorkin for his attack in the New York Times on the banks that successfully used their lobbying power to get Congress to exempt them from business-method patents link here. Sorkin's beef is that the banks have enormous political power, based on their political contributions, while defending such patents as having been successfully blessed by our courts.

Salmon agrees that the banks have great political power but emphasizes the whole questionable field of business-method patents and comes out opposed. More broadly, he objects that we have too many questionable patents and way too much litigation that drives up costs, while adding no benefit to consumers.

It is nice to have another blogger on this side of the argument. More and more are joining the chorus.

APPLE has now received a patent for two fingered gestures on a touchscreen according to this link here and to a much more extensive set of claims by another interpretation link here. For the rest of us, it would appear there is loads of prior art that would preclude granting such a patent but the Patent Office seems unable to resist granting them and extending the monopoly farther and farther. But why should two finger gestures get patented while one finger ones don't?

The broader significance is that the big players in the industry can be challenged, as Google has done, but it looks as if that may be the last. The big guys have circled the wagons and will win unless the patent law gets changed. Chances?

If you read either the newspapers or the business press, you still won't really be sure about the details of Nortel's sale of its patents, but apparently some were sold to a consortium of Microsoft, Apple, etc. and some were sold to individual companies link here. This is being played as a defeat for Google which made an initial bid and subsequent competitive bids but dropped out after the price rose above $4 billion. It might equally be viewed as a victory for Google, having made arch-competitors pay far more than they dreamed of having to.

The real losers here were us consumers who will pay more for things produced under the patents. We will also see less inter-company competition and less innovation. This further cements the already long standing position of the incumbents, which will also restrict innovation.

Still think patents promote innovation?

The New York Times ran four letters today criticizing its earlier editorial on the Protect IP Act currently in Congress link here. All four were written by the minions of the copyright industry who railed against the injustice of copying or as they prefer, piracy.

I had intended to write on the original editorial when it appeared link here, but Mike Masnick did such a masterful job that I decided to refrain link here. Take a look, if you haven't already.

We need a better vocabulary. They call us opponents "pirates" and "robbers" and we can only respond, "monopolists." Those monopolists are the real thieves with their government created and enforced monopolies who use an artificial shortage to raise prices and throttle innovation under the guise of protecting private property when it is neither property that you can see and touch nor private but the creation of a long discredited and dead king who extracted rents for his own preservation.

Edward Wyatt writes in the NYTimes about an example of a costly business-method patent link here. His story emphasizes that Senator Schumer is doing the banking industry's business, has got the bill passed in the Senate as part of the broader "reform" patent bill, and has sent it on to the House. It may or may not pass there, but given the banks' clout with Republicans, I expect the provision will be approved if the overall bill passes. Wyatt doesn't speculate on whether the President will sign, but he is out passing the hat for campaign funds among the banks.

The banks concern is the cost of their patent license, said to be hundreds of millions over the years. The patent is for a method to process digital copies of checks, which to me sounds like a software patent. The patent owner, DataTreasury Corporation from Plano TX, has won a series of suits challenging the validity of the patent at the Patent Office and won consistently in the courts. DataTreasury now has license agreements with "more than three dozen banks," so it would seem to be the industry standard.

Wyatt adds one more jab at DataTreasury which he reports once had more than 100 employees but is now a mere holding company with only a few employees, reportedly because the banks stole its patented technology.

Wyatt finally takes on the Patent Office which is said to have drafted the provision and would be the biggest winner from the current draft bill, as it would get to keep all the fees it charges, "removing it from the politics of the Congressional appropriations process."

Our concern as consumers should be that this is a highly questionable patent (like most business method patents) that adds to the costs of society as a whole without improving welfare. Watching how the legislative sausage is being made does not make it smell less or taste better.

The Economist examines academic publishing link here, "And what a living it is. Academic journals generally get their articles for nothing and may pay little to editors and peer reviewers. They sell to the very universities that provide that cheap labour. As other media falter, academic publishers have soared. Elsevier, the biggest publisher of journals with almost 2,000 titles, cruised through the recession. Last year it made £724m ($1.1 billion) on revenues of £2 billion an operating-profit margin of 36%."

Most of the publishers' revenues came from university libraries which subscribed to bundles of journals at very high prices, according to the article. Now, the universities can no longer afford to do so. This racket is based on the fact that academic promotion comes from peer-reviewed publications in these journals, now for the most part online.

The Economist doesn't mention it, but the solution is to set up their own peer-reviewed journals on line. The saving in subscriptions should be more than enough to pay generously for such a system. Why they haven't remains a mystery.

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.

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."

James Boyle has written a new book--The Public Domain: Enclosing the Commons of the Mind--on IP which is notably available for downloading at no cost as well as for purchase in hard copy link here. There is much more to explore at his website, so read the book and visit his website. This is just what is needed to get more people on the side of rational public policy and against the monopolists.

Nina Paley blogs here She posts this on her cartoon site: "Copying is an act of love. Please copy & share."