Details here:

http://www.wired.com/threatlevel/2010/07/copyrightfiltering-scribd/

The fact that the lawsuit was dropped does not diminish the illustration of how insane the copyright lawsuit industry has become. Its own logic begins to fold in on itself.

The New York Times has a good short article on the growth of patent trolls (which it terms as non practicing entities or NPEs) link here. The story hangs on the suit against EBay for $3.8 billion by XPRT Ventures which goes unmentioned thereafter.

It then describes the basic patent troll model: "The basic idea is that an investment firm buys a pre-existing patent for, say, $2 million. It then sues perhaps a dozen companies that use technology potentially overlapping the patent. Each firm that fights may end up paying $500,000 or more to defend itself and could also face penalties. The alternative is to settle for, say, $1 million or so. If just three firms pay up to avoid a battle, the patent owner makes big money."

The EBay example is not particularly apt here since it is for so much money that EBay is likely to fight it. But the story provides the excuse for the article which goes on to cite the rise in the number of such suits, 500 last year or six times the number in 2001.

The article then switches to a "new" business response to the patent troll threat, the counter-troll that acquires patents to sue or cross license other firms by which its member companies might be sued for infringement. Thus for a generous annual fee, it seems to offer some insurance against loss.

Its exemplar, roughly two year old RPX, has an extensive website link here, a puff piece, and Google adds little more. However, the Times piece reminded me of ten-year-old Intellectual Ventures about which we wrote link here and which now has a Wiki write-up link here . I checked quickly for officer names of the two but found no overlap. I do note, however, that IV has some big corporate subscribers including Microsoft, Verizon (also "insured" by IV), and Intel.

Thus the "counter-troll" model seems to have proved so attractive that it has spawned a rival. Here is another reminder of how patents enrich the big oligopoly companies and exploit the consumer while providing no benefit to the inventor in whose name patents are issued.

Reposted with permission from Creative Commons:

ASCAP's Attack on Creative Commons

The American Society of Composers, Authors and Publishers (ASCAP) has launched a campaign to raise money from its members to hire lobbyists to protect them against the dangers of "Copyleft." Groups such as Creative Commons, Public Knowledge, and the Electronic Frontier Foundation are "mobilizing," ASCAP describes in a letter to its members, "to promote 'Copyleft' in order to undermine our 'Copyright.'" "[O]ur opponents are influencing Congress against the interests of music creators," ASCAP warns. Indeed, as the letter ominously predicts, this is ASCAP's "biggest challenge ever." (Historians of BMI might be a bit surprised about that claim in particular.)

As a founding board member of two of those three organizations, and former board member of the third, I guess I should be proud that a 96 year old organization would be so terrified of our work. And I would be if there were anything in this fundraising pitch that was actually true.

But there is not. Creative Commons, Public Knowledge and EFF are not aiming to "undermine" copyright; they are not spreading the word that "music should be free"; and there is certainly not yet any rally within Congress in favor of any of the issues that these groups do push.

I know Creative Commons best, so let me address ASCAP's charges as they apply to it.

Creative Commons is a nonprofit that provides copyright licenses pro bono to artists and creators so that they can offer their creative work with the freedom they intend it to carry. (Think not "All Rights Reserved" but "Some Rights Reserved.") Using these licenses, a musician might allow his music to be used for noncommercial purposes (by kids making a video, for example, or for sharing among friends), so long as attribution to the artist is kept. Or an academic might permit her work to be shared for whatever purpose, again, so long as attribution is maintained. Or a collaborative project such as a wiki might guarantee that the collective work of the thousands who have built the wiki remains free for everyone forever. Hundreds of millions of digital objects from music to video to photographs to architectural designs to scientific journals to teachers lesson plans to books and to blogs have been licensed in this way, and by an extraordinarily diverse range of creators or rights holders including Nine Inch Nails, Beastie Boys, Youssou N'Dour, Curt Smith, David Byrne, Radiohead, Jonathan Coulton, Kristin Hersh, and Snoop Dogg, as well as Wikipedia and the White House.

These licenses are, obviously, copyright licenses. They depend upon a firm and reliable system of copyright for them to work. Thus CC could have no interest in "undermining" the very system the licenses depend upon copyright. Indeed, to the contrary, CC only aims to strengthen the objectives of copyright, by giving the creators a simpler way to exercise their rights.

These licenses are also (and also obviously) voluntary. CC has never argued that anyone should waive any of their rights. (I've been less tolerant towards academics, but I have never said that any artist is morally obligated to waive any right granted to her by copyright.)

And finally, these licenses reveal no objective to make "music free." Nine Inch Nails, for example, have earned record sales from songs licensed under Creative Commons licenses.

Instead, the only thing Creative Commons wants to make free is artists free to choose how best to license their creative work. This is one value we firmly believe in that copyright was meant for authors, and that authors should have the control over their copyright.

This isn't the first time that ASCAP has misrepresented the objectives of our organization. But could we make it the last? We have no objection to collective rights organizations: They too were an innovative and voluntary solution (in America at least) to a challenging copyright problem created by new technologies. And I at least am confident that collecting rights societies will be a part of the copyright landscape forever.

So here's my challenge, ASCAP President Paul Williams: Let's address our differences the way decent souls do. In a debate. I'm a big fan of yours, and If you'll grant me the permission, I'd even be willing to sing one of your songs (or not) if you'll accept my challenge of a debate. We could ask the New York Public Library to host the event. I am willing to do whatever I can to accommodate your schedule.

Let's meet and address these perceived differences with honesty and good faith. No doubt we have disagreements (for instance, I love rainy days, and Mondays rarely get me down). But on the issues that your organization and mine care about, there should be no difference worthy of an attack.

Meanwhile, you can read more about Creative Commons here, and support its response to the ASCAP campaign here.

Even the Wall Street Journal is stepping in -- even if it is the Weekend Journal.

Woodlief, Tony. 2010. "Curse of the Greedy Copyright Holders." Wall Street Journal (9 July). http://online.wsj.com/article/SB10001424052748704608104575220551906611796.html?mod=ITP_weekendjournal_6

"When I asked to use a single line by songwriter Joe Henry, for example, his record label's parent company demanded $150 for every 7,500 copies of my book. Assuming I sell enough books to earn back my modest advance, this amounts to roughly 1.5% of my earnings, all for quoting eight words from one of Mr. Henry's songs. I love Joe Henry, but the price was too high. I replaced him with Shakespeare, whose work (depending on which edition you use) is in the public domain. Mr. Henry's record label may differ, but it's not clear that his interests -- or theirs -- are being served here. Were they concerned that readers might have their thirst for Mr. Henry's music sated by that single lyric? Isn't it more likely that his lyric would have enticed customers who otherwise wouldn't have heard of him?"

As you know we welcome comments. However the comments sidebar is getting taking over by gratuitous exchanges of insults rather than intellectual commentary on whatever side or point. I've tried not to moderate the comments beyond removing obvious spam. Heated exchanges are one thing but constant exchanges of insults are something else. I think interested readers are starting to feel discouraged by the tone of some of the comments, and some have complained. Let me start by requesting especially Lonnie, "nobody" and "none of your beeswax" to dial it back. If provoked don't respond, please try to stick to the intellectual point. If necessary we (the editors) will start removing posts that are designed to offend rather than inform. If you think another commentator is out of line, please don't respond in the comments, just let one of us know so we can take appropriate action.

Thanks,

David

Talking Points Memo tells us that Nevada Senatorial candidate Sharon Angle, running against Senate Majority Leader Harry Reid, has sued him for violating copyright link here. He had posted her old website after she took it down and rewrote her old far-right positions used to win the primary, in favor of more moderate ones.

Reid did take down the copy, after stating that he had made his point about her retailored views.

This interesting abuse or misuse of copyright law again shows an old fox obeying the law but getting what he wanted, including great publicity in a campaign where it is not all that easy to get news coverage.

CMR International, a firm that tracks that performance of the pharmaceuticals sector, released a rather depressing report on research and development productivity last week. The report will set you back $10,000, but highlights have been made public:

- A total of 26 new molecular entities (NMEs) were launched onto the global market in 2009, an increase on 2008's 20-year low of 21. But the number of launches last year was still only a little more than half the peak level in 1997.

- The number of experimental drug projects terminated at the final Phase III stage of development had doubled in the period 2007-2009 compared with 2004-2006.

- Total global R&D expenditure dropped by 0.3 percent in 2009, after a 6.6 percent rise in 2008 and rapid growth seen in earlier years.

- Pharma is having a tough time selling its new drugs: New drugs launched within the last five years accounted for less than 7 percent of industry sales in 2009, down from 8 percent in 2008, highlighting the big problems that companies are having in trying to reinvigorate their portfolios.

Matt Mitchell draws our attention to

Stevens "concurring" opinion in Bilski, especially part VI. It is a pretty good summary of why patents are bad, generally. He confines his argument to business method patents, but they are easily extended in most cases.

The relevant part starts on page 41, after he makes a fairly unspecific defense of patents generally. In many sentences in the rest of VI you can just delete "business" or "business method" and reach the same conclusion as Stevens.

For instance, on the disclosure case for business method patents, I have replaced the specific use of terms realating to business methods with the general word "innovations." It is remarkably still a fairly lucid case, using only a find/replace on Stevens' argument:

"Nor, in many cases, would patents on (innovations) promote progress by encouraging 'public disclosure.' Many (innovations) are practiced in public, and therefore a patent does not necessarily encourage the dissemination of anything not already known. And for the (innovations) practiced in private, the benefits of disclosure may be small: Many such (innovations) are distributive, not productive - that is, they do not generate any efficiency but only provide a means for competitors to one-up each other in a battle for pieces of the pie. And as the Court has explained, 'it is hard to see how the public would be benefited by disclosure' of certain (innovations), since the nondisclosure of these (innovations) 'encourages businesses to initiate new and individualized (innovations),' which 'in turn, leads to a greater variety of (innovations).'"

There are lots of other examples in the "concurring" opinion.

Decision is kind of bad news, though. Thought they would end a lot of goofy patents.

Rufus Pollock has been looking into what the public domain doesn't look like. Here is a post with details.

The Supreme Court handed down this term's final four decisions today: Christian Legal Society Chapter v. Martinez, on public university limitations on a Christian student group's rights of association; the McDonald v. Chicago case incorporating the Heller gun decision against the states (Huebert's discusssion); Free Enterprise Fund v. Public Co. Oversight Bd. (a Sarbanes-Oxley decision); and Bilski v. Doll, a much-anticipated patent case.

Patent law is mind numbingly arcane, technical, and boring, so let me simplify as much as possible. This case was about what the legal test should be to determine whether certain processes can be possibly eligible for patent protection. For typical practical technical or industrial processes, it's not a difficult question. But for "business-related" methods, such as the one here--which had to do a way for commodities buyers and sellers in the energy market to hedge against the risk of price changes by following a certain mathematical formula--the question gets trickier. Courts are leery of opening the door all the way because then we'd be swamped in even more ridiculous patents than we are now (such as the attempt by Dustin Stamper, President Bush's Top Economist, to secure a patent regarding an application for a System And Method For Multi-State Tax Analysis, which claims "a method, comprising: creating one or more alternate entity structures based on a base entity structure, the base entity structure comprising one or more entities; determining a tax liability for each alternate entity structure and the base entity structure; and generating a result based on comparing each of the determined tax liabilities").

The Court of Appeals for the Federal Circuit (CAFC) tried to do this by adopting a more rigid test than had been used before. They said that a process could be patented only if it (1) it is tied to a particular machine or apparatus, or (2) it transforms a particular article into a different state or thing--this is the "machine-or-transformation test." Based on this test, the claimed business method was rejected. The problem is, this test is not in the Patent Act. So the Supremes had to take a crack at it. Now I have mentioned this case before, in The Arbitrariness of Patent Law; Supreme Skepticism Toward Method Patents; and Radical Patent Reform Is Not on the Way. This is one of these cases that had patent lawyers crying crocodile tears, gnashing their teeth, acting as if this was just part of the terrible and radical--radical!--movement to scale back patent rights. Anyway, I predicted:"I suspect the Court will choke back a bit on software and business method patents-but not too much." It was obvious from the oral arguments that the Court saw how ridiculous it would be to have an open test that allowed a lot more types of processes be eligible for protection. You could have patents on anything. So they want to choke back on this, and so did the CAFC. Unfortunately, the patent law is there. And the judges have to interpret this mess. It's not their fault, really. I don't blame them for this impossible task. As I noted in a recent post,

As I noted in Another Problem with Legislation: James Carter v. the Field Codes, there is a fascinating paper published in 1884 by James C. Carter, The Proposed Codification of Our Common Law: A Paper Prepared at the Request of The Committee of the Bar Association of the City of New York, Appointed to Oppose the Measure. This paper was an attack on David Dudley Field's attempt to (legislatively) codify New York's common law. Carter opposed replacing case law with centralized legislation. Carter notes that caselaw precedents are flexible and allow the judge to do justice (see also John Hasnas's classic The Myth of the Rule of Law), while statutes are applied literally, even where injustice is done or the legislator did not contemplate this result. Thus, Carter argues, one of the worst effects of legislatively codifying law-replacing organically developed law with artificial statutes-is that it changes the role of courts and judges from one in which the judge searches for justice into mere squabbles over definitions of words found in statutes. As he said at pp. 86-86:

At present, when any doubt arises in any particular case as to what the true rule of the unwritten [i.e., judge-found, common-law developed] law is, it is at once assumed that the rule most in accordance with justice and sound policy is the one which must be declared to be the law. The search is for that rule. The appeal is squarely made to the highest considerations of morality and justice. These are the rallying points of the struggle. The contention is ennobling and beneficial to the advocates, to the judges, to the parties, to the auditors, and so indirectly to the whole community. The decision then made records another step in the advance of human reason towards that perfection after which it forever aspires. But when the law is conceded to be written down in a statute, and the only question is what the statute means, a contention unspeakably inferior is substituted. The dispute is about words. The question of what is right or wrong, just or unjust, is irrelevant and out of place. The only question is what has been written. What a wretched exchange for the manly encounter upon the elevated plane of principle!

Or, as I note in "Legislation and the Discovery of Law in a Free Society," Journal of Libertarian Studies 11 (Summer 1995), "Thus, previously, law was thought of as a body of true principles ripe for discovery by judges, not as whatever the legislator decreed. Nowadays, however, legislation has become such a ubiquitous way of making law that ‘the very idea that the law might not be identical with legislation seems odd both to students of law and to laymen.'" [Bruno Leoni, Freedom and the Law]

The point is, the judges here are merely interpreting arbitrary words of an artificial law, a statute--a written down edict of the legislature, a bunch of words that have no inner harmony, no guarantee of consistency, no relationship to justice. So you can't really criticize the courts too much for how they construe these legal abominations.

Back to Bilski. So the Court rejected the CAFC's holding that the "machine-or-transformation test" was the sole test for determining patent eligibility. They said that while this test "may be a useful and important clue or investigative tool, it is not the sole test for deciding whether an invention is a patent-eligible 'process.'"But they had to find a way to strike down this patent, so they did so based on an older test, one that just said you can't patent "abstract ideas." So, the Court was able to reject the narrow test of the CAFC, without having to allow this business method patent. But they wanted to encourage the CAFC that they could try to find yet other ways to limit questionable method patents: "In disapproving an exclusive machine-or-transformation test, we by no means foreclose the Federal Circuit's development of other limiting criteria that further the purposes of the Patent Act and are not inconsistent with its text." I.e., they punted: you guys figure out a better way to shut the doors a bit more, consistent with this statute.

So what do we have: we have a very slight narrowing of patent eligibility by re-use of an old "abstract idea" test; a rejection of the more bright-line, narrower but unstatutory test of the CAFC; and more legal uncertainty. And while the patent bar will use the slightest modification of patent law to cry that the sky is falling, it's not. Unfortunately.

(H/t Anita Acavalos for suggestions re the title.)