While it's the "big" patent lawsuits that seem to get most of the attention in the press -- the Samsung/Apples and the Oracle/Googles -- those cases involve "equal" companies who can afford to throw a few million into expensive lawyers to fight the fight. But there's a growing and really dangerous aspect in the patent world these days: how patent trolls are increasingly going after startups. That's a big deal when startups are the biggest creators of new jobs (and great innovations), but the impact of patent trolls on smaller companies just doesn't get that much attention. Thankfully, law professor Colleen Chien has been doing a lot work here and has just released an excellent new paper all about how startups are hurt by patent trolls (though she now uses the latest favored term for patent trolls: PAEs or "Patent Assertion Entities").

I find that although large companies tend to dominate patent headlines, most unique defendants to troll suits are small. Companies with less than $100M annual revenue represent at least 66% of unique defendants and 55% of unique defendants in PAE suits make under $10M per year. Suing small companies appears distinguish PAEs from operating companies, who sued companies with less than $10M per year of revenue only 16% of the time, based on unique defendants. Based on survey responses, the smaller the company, the more likely it was to report a significant operational impact. A large percentage of responders reported a “significant operational impact”: delayed hiring or achievement of another milestone, change in the product, a pivot in business strategy, shutting down a business line or the entire business, and/or lost valuation. To the extent patent demands tax innovation, then, they appear to do so regressively, with small companies targeted more as unique defendants , and paying more in time, money and operational impact, relative to their size, than large firms.

The following chart from the report more or less speaks for itself: the smaller you are, the much higher the likelihood that a demand from a patent troll (even beyond just a lawsuit) had a "significant" operational impact. This may not be surprising, but it is really telling: The whole report is a worthwhile read. One thing that I like is that it even spends a bit of time talking about the emotional impact getting sued by a patent troll. Getting sued (or even threatened with a lawsuit) is a deeply scary moment, and that kind of pressure can tear apart good startups.

Patent demands can exact a personal toll: as responders remarked, demands have “invoked rage over the waste of time,” made a target “very very angry,” “ruined family friends” and caused “stress” and “ill-will generation [sic].” As several survey respondents put it,

“It was agonizing to hand over all the money we had earned from a product we had invented and created ourselves to a firm that invents nothing and creates nothing. Our founder has since lost his house, car [sic] all his assets.”

“They sued my startup for infringement on a group of insanely broad software patents. While many much larger companies are fighting we do not have the resources to do so. It is the single most frustrating experiences I've had professionally. Extortion, pure and simple. The troll even admitted his model was to sue everyone, get settlement dollars because fighting was too expensive.”

“We wasted about 50k of hard earned money on litigations :-/ [sic]”

As defense lawyers who work with a large number of large and small companies put it, some small companies are “much more likely to take it personally” and threats can “send them over the edge,” inflicting considerable emotional distress.

That emotional impact is really really powerful and can cause otherwise good startups to completely collapse under the pressure. It's good to see that the report attempts to account for some of that, even if it's not the focus of the report.

And, of course, the damage isn't just to the companies, but to innovation itself, as people just give up due to being restricted in what they can do -- including having some companies give up on the US market entirely:

Among those who had not received a demand, some reported significant impacts from watching others receive them. Numerous respondents who had not received a demand said they used open source software in order to avoid liability. Others reported being very conscious of patent threats. Said one small software company, for example: “[w]e have limited ourselves to the UK & European markets, simply because the mere threat of Patent Litigation if we enter the US market, is a WHEN not IF question.” Another said “I used to develop software for retail and on spec for publishing by other companies. But we've quit that because the risk of patent litigation.”

Hopefully as we start to see more data like this, policymakers will realize that the system is very, very broken.

A few weeks ago, we wrote about some research being done by Colleen Chien, a law professor, concerning the impact of patent trolls on startups and tech companies. If you represent a tech company which has had to deal with patent trolls, please take a few minutes to answer these survey questions. The research results that come out of this should be quite helpful in understanding the impact of trolls on innovative startups.

The Olympic games publicize the physical achievements of athletes, but what about the notable achievements of scientists? It's somewhat hard to cheer for individuals working on fundamental research, but sometimes scientists get some well-deserved recognition. There are other prizes besides the Nobel, and here are just a few international awards for smart folks working on scientific endeavors.

• The first round of the Fundamental Physics Prize has been awarded to 9 physicists -- handpicked by Russian billionaire Yuri Milner to receive $3 million each. The Milner Foundation prize is a little more than double the value of the Nobel prize in the same category (which is worth about $1.2 million), but is the prestige of the Nobel greater? [url]
• The Kavli Prizes started in 2008 to award million-dollar prizes in astrophysics, neuroscience and nanoscience. The Kavli Foundation was started by Norwegian businessman and philanthropist, Fred Kavli. These Kavli prizes are not as well-known as the Nobel, but the Swedes don't have a monopoly on awarding scientific medals. [url]
• The Crafoord Prize tries to complement the Nobel prizes by picking significant achievements in fields that the Nobel ignores: astronomy and mathematics, biosciences, geosciences or polyarthritis research. The very specific prize for rheumatoid arthritis research was instituted because Holger Crafoord suffered from the disease, but it's only awarded by a special committee that decides when such an honor is warranted. [url]

If you'd like to read more awesome and interesting stuff, check out this unrelated (but not entirely random!) Techdirt post.

We've had plenty of stories over the years of Monsanto's incredibly aggressive stance when it comes to its "Roundup Ready" patents. The company has now been awarded $1 billion from Dupont for infringing on one of these patents. Now, here's a case where we're talking about competing companies, so perhaps no big deal, right? Except there's one tidbit here that makes this interesting: Dupont never brought the product in question to market. So the "damages" to Monsanto would seem to be minimal... except in a court of law apparently. According to Patently-O:

The damages theory was interesting. Since the accused product was not yet on the market, Monsanto did not seek any lost profit. Rather, Monsanto demanded a reasonable royalty for the research-use made by the defendants. Monsanto argued that the use of Monsanto's invention in DuPont's labs and Pioneer's test fields gave those companies an "improper head start" in making the GM seeds. The judge and jury agreed – if those companies wanted to build upon the invention then they should have first obtained a license. In the pharmaceutical world, 35 U.S.C. § 271(e) offers a research exemption for this type of activity. However, that exception does not apply here because of the low level of regulation over genetically modified food-products. The patent is set to expire in 2014. The patentee's right-to-exclusive-research supported by this case means that the 2014 date offers a starting-date for follow-on competitive research. Any actual products building directly upon the patented invention will arrive on the market sometime later.

Got that? Normally, companies can build on top of others' products as patents are set to expire, so they're ready to launch once the patent has expired. But, in this case, even trying to build new offerings in a lab for use later is apparently an insane billion dollar issue. Even worse, it means that any real competition, which will create more market-reasonable prices, gets significantly delayed as no one can prepare for when the patent expires.

Law professor Colleen Chien, who has done some great work on the issue of patent trolls, is looking for insights and data from companies and developers who have been threatened by patent trolls. She's created a survey and is seeking input from those on the receiving end of patent threats: demand letters, lawsuits, etc. I know plenty of folks here have experienced that themselves and/or work for companies who have. If you have directly been on the receiving end, please fill out the (short) survey. If you work for a company who has, or if you know someone else who has been in this situation, please share the survey with them. The more accurate data that Chien has, the better the research will turn out in the end.

Yesterday, Techdirt reported on the UK government's plans to make publicly-funded scientific research freely available as open access. One concern was that its approach required funds to be diverted from research to pay for the article processing charges levied by so-called "gold" open access titles. One figure being bandied around was about $80 million per year, but a new report in the Guardian suggests this is a huge over-estimate, and that the true cost will be more like a fifth of that figure.

The same article notes that the government was not the only one making strong open access moves in the UK:

Research Councils UK, a coalition of the UK's biggest research funders, released its own updated open access policy, which is even more forthright than the broader government policy in requiring true open access that allows free commercial re-use. And maybe most important of all in the long term, flying in under the radar, the Higher Education Funding Council for England announced plans to require open access in all publications evaluated for the Research Evaluation Framework. This will remove the main reason that traditionalists have shied away from open access: fear that publications in newer OA journals will not be perceived as prestigious as those in long-established subscription journals.

As that points out, the requirements of these two research funders are even more stringent than the UK government's plans, and should accelerate the move to open access well in advance of the latter's introduction, by placing open access at the heart of academic evaluation in the UK.

Hard on the heels of those UK announcements, the European Commission has now released details of its own proposed open access policy:

the Commission will make open access to scientific publications a general principle of Horizon 2020, the EU's Research & Innovation funding programme for 2014-2020. As of 2014, all articles produced with funding from Horizon 2020 will have to be accessible:

articles will either immediately be made accessible online by the publisher ('Gold' open access) -- up-front publication costs can be eligible for reimbursement by the European Commission; or

researchers will make their articles available through an open access repository no later than six months (12 months for articles in the fields of social sciences and humanities) after publication ('Green' open access).

Researchers can therefore opt either for immediate "gold" open access, where fees are covered by the EU, or to publish in traditional titles with delayed "green" open access afterwards. In addition, the Commission is hopping on the open data bandwagon:

The Commission will also start experimenting with open access to the data collected during publicly funded research (e.g. the numerical results of experiments), taking into account legitimate concerns related to the fundee's commercial interests or to privacy.

That may seem a little timid, but it's worth bearing in mind that the EU tends to move cautiously: it first started flirting with the idea of open access back in 2006, as this background page listing related initiatives make plain. Another aspect of open access that the European Commission has only begun to explore is providing the software used to produce scientific results (pdf), an idea discussed on Techdirt last month:

The Commission will also encourage, where appropriate, the publication of software codes used to produce or process the data.

It's worth emphasizing that these are just proposals, and subject to revision. But currently they include a call for individual EU countries to adopt similar policies with a goal of making 60% of European publicly-funded research articles available under open access by 2016. Together with all the other national moves around the world, the EU's far-reaching plans would seem to signal that open access has reached a tipping point, and could soon be the norm.

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We've talked about the various debates concerning open access to federally funded research, and while there are still debates going on about bills in one direction or the other at the federal level, it looks like some politicians in NY State want to take matters into their own hands.

Earlier this year, a bill was introduced in the NY State Senate to establish open access to publicly funded research:

Each year, New York State agencies distribute tens of millions of dollars in direct and underwritten funding to original research projects. Much of the time, these papers receive publication to peer-reviewed journals, However, while the internet has expanded the breadth of free information that is available to the general public, many peer reviewed journals maintain prohibitive cost barriers which block widespread public access.

New York State proudly supports its dedicated funding to research which helps create scientific, environmental, and cultural breakthroughs; however it is unacceptable that that the taxpayers who provide the money for this research should encounter any barrier in accessing it.

This bill will provide a window for 6 months of exclusive protection to the research, at which point it is only just that the general public be free to share in the information generated from the research. Passing this law will give New York the honor of being the first state in the country to require public access to research generated from taxpayer dollars.

I have no idea if this bill has any legs, but it's good to see such efforts being made.

Canadian copyright is undergoing huge changes. The copyright reform bill is very close to becoming law, bringing with it some fantastic new fair dealing provisions (though unfortunately along with a significant downside in the form of digital locks rules), and now the Supreme Court has stepped in with a series of major rulings that reinforce users' rights and begin the process of cleaning up the mess that is Canada's copyright tariff system. This morning, the court published five separate judgements in cases related to tariffs and royalties, and each one contains significant victories for smarter copyright law.

There is a lot to dig into in this series of rulings, and some complex legal questions involved in some portions, but each one also makes clear statements. In the first case, between Alberta schools and the copyright collective Access Copyright, the court found that photocopies for classroom use can be covered by the "research" provisions of fair dealing. In the second case, between videogame publishers and a music collection society, the court found that selling videogames does not constitute a new public performance of the music they contain, and thus does not require a public performance royalty (yes—the Copyright Board and Federal Court of Appeals had both previously ruled that transmitting videogames with music in them counts as "communication to the public"). Similarly, in the third case, the court found that films which contain music are also not public performances requiring an additional royalty (on that one, the lower courts had gotten it right and also refused to certify the tariff). In the fourth case, the court affirmed that while streaming music to users is a public performance, offering music for download is not—so services like iTunes also don't have to pay additional performance royalties. Finally, in the ruling that may get the most attention, the court found that 30 second previews of songs provided by online music services qualify as fair dealing for the purposes of research—a battle that has been going on for a long time in Canada and is now, finally, put to rest.

The rulings also contain a lot of very important language that will have a lasting impact beyond these specific scenarios. The Supreme Court reaffirms the fact that fair dealing must have a "large and liberal" interpretation, and set down some clear restrictions on the power of the Copyright Board. Howard Knopf does an excellent job of summing up some of the important points and broader themes of these five landmark rulings:

• Collectives cannot assume that they will be entitled to an additional "layer" of remunerated rights every time there is a new method of delivery. Technological neutrality matters.
• The Court said what it meant and meant what is said in CCH v. LSUC in 2004 and will move forward from there - not be pushed backwards.
• Users have rights that must be given a "large and liberal interpretation". Copyright doesn't exist solely for collectives.
• Educators are in a "symbiotic" relationship with students and the Copyright Act serves the goal of education, which includes access to essential material
• Copyright law is both about "protection" and "access"
• Copyright law is about "dissemination"
• "Research" is not restricted to "creative purposes". Consumer research counts too. Research can even be for "personal interest". There is no absolute requirement for "transformative" use in Canada
• The user's purpose is the one that counts in fair dealing
• Practices that increase the sale of work cannot be said to have a negative impact on the work
• The concept "public" must be considered in light of new technology, technological neutrality and the purpose of the legislation. The fact that communication may be interactive on an individual basis does not mean that it cannot be considered to be to the "public"
• When the statute uses a word such as "excludes", it means it. The word is not superfluous.
• Parliament did not intend to "recognize a superior expertise of the [Copyright] Board relative to the courts with respect to legal questions arising under the Copyright Act". On copyright questions of "first instance", the Board will get no more deference that any court would get. In other words, the Board must be "correct". It will not be sufficient that it merely be "reasonable"

One of the groups that is likely to be hit the hardest by these rulings is Access Copyright. We've covered the fact that Canada's university association struck a terrible deal with Access Copyright for the clearance of educational materials, and several major Canadian unversities are refusing to sign on. This Supreme Court case was not directly dealing with that situation (it covers only primary and secondary schools), but the ruling contains a complete tear-down of Access Copyright's entire business model which applies every bit as much to universities and colleges. Michael Geist walks through the point-by-point dismantling of all Access Copyright's standard arguments against fair dealing, leaving them very few legs to stand on moving forward. For those universities that plan to clear their own copyrights, this is a very big win—for those that didn't have the resources to keep fighting after the AUCC abandoned them, it just highlights how bad of a deal they got.

Copyright law in Canada has its problems—first and foremost the extremely bad digital locks rules that will come into effect with Bill C-11. But, increasingly, and most notably at the Supreme Court level, we've also been making significant strides in the right direction, using legal language that displays a clear understanding of both modern realities and the need for balance in copyright law. There are still important battles to be fought, but today the Supreme Court gave us a huge arsenal of new weapons.

Social networks are clearly a very fashionable field of study right now because they provide an unprecedented volume of records for human interactions that can be mined for trends and correlations... and marketing strategies. Figuring out how viral messages spread could teach us how to educate our peers or to notify people about emergencies or to advertise caffeinated beverages. Here are just a few studies on how people behave in online communities.

• If you're looking to create the next Facebook, it might help to know that it's not the absolute number of friends on a social network that encourages new users to join, but the types of friends who are already signed up. A user who gets an invitation to join Facebook is more than twice as likely to join if he/she sees more than 4 of separate groups of friends are already signed up. That's real peer pressure at work. [url]
• Twitter bots can influence the behavior of online communities and help speed up human-to-human communications. These bots don't have to pass a rigorous Turing test to fool people into following and tweeting more frequently. [url]
• [PDF link:] Another research abstract discusses work on identifying influential and susceptible people on Facebook by looking at how viral messages spread. Influentials are thought to be critical people in disseminating information, but where would they be without their susceptible audiences? [url]

If you'd like to read more awesome and interesting stuff, check out this unrelated (but not entirely random!) Techdirt post.

For years we've discussed the issue of open access for federally funded research. Currently, NIH has a program that requires any of the research that receives its funds to be available via public open access databases a year after its published elsewhere. While this still allows federally funded research to be locked up under a questionable copyright for a year, it's certainly better than locking it up for eternity. And while there have been some unfortunate efforts to ban NIH and other government agencies from requiring such conditions, many in academia favor such information sharing.

There is currently a White House petition asking the government to require such free access to scientific journal articles coming out of taxpayer-funded research. The Obama administration has indicated interest in doing this in the past, but has not done so. Forcing the administration to respond to the petition may help nudge them in the right direction. The petition still needs a lot more signatures, though, so get signing.