by Mike Masnick
Thu, May 24th 2012 7:59pm
Filed Under:
contest, creativity, nyu, programming, university of virginia
Researchers from NYU and the University of Virginia are looking for computer programmers to participate in a study of creativity and innovation. The study involves a creativity contest that will take about 5-10 minutes. The winner will receive a $500 prize. The researchers are looking for professional and serious amateur computer programmers to participate. You can access the study here.
by Mike Masnick
Thu, May 17th 2012 12:50pm
Filed Under:
cafc, jim bessen, michael meurer, paul michel, randall rader, tech industry
Last year, we were quite disappointed (but not surprised) to see former CAFC Judge Paul Michel argue publicly that we need many more patents to encourage innovation. He went so far as to suggest a tax credit for getting patents. He also argued that more patents would mean more technology jobs -- ignoring pretty much all of the research out there. CAFC, of course, is the appeals court that handles most patent appeals cases, and since its establishment has been a major part of the problem. You can trace the massive expansion of bogus patents to CAFC's views on patenting, expanding what was thought to be patentable, and generally doing tremendous harm to the important limits on such government granted monopolies.
Tim Lee recently got to talk to Michel following a talk he gave, and what becomes clear is that Michel is completely out of touch with how much of a problem patents are in the tech world today. Lee knows this subject better than probably anyone else, and when he tried to dig in on key points, it was obvious that Michel's knowledge of what actually is happening in the industry is based on myths and imagination, rather than reality. For example, when Michel pointed out that he's "a facts and figures guy" rather than one who focuses on "anecdotes and assumptions," Lee quickly points to James Bessen and Michael Meurer's comprehensive book on why patents hurt the tech industry. Michel does not appear to have actually read the book:
Some scholars have collected facts and figures. For example, a 2008 book by James Bessen and Michael Meurer attempted to compute the costs and benefits of the patent system to various industries. They found that benefits significantly exceeded costs for the pharmaceutical industry, but the costs of litigation exceeded the benefits of holding patents in many other industries. Their work suggests that the patent system has become a net disincentive to innovation in those industries. The problem was particularly severe in software.Indeed, anyone who claims that the Bessen and Meurer book is about anecdotes either hasn't read it or is lying. It goes through so much data and so much evidence that, at times, it's a daunting read. But what Lee's discussion with Michel shows is that, while he insists he's not about "anecdotes and assumptions," that appears to be what he's entirely about. This comes to light quite clearly when Michel finally suggests that if software patents are so bad for innovation, that software companies can just "opt out":
Strangely, Michel singled out Bessen and Meurer's book as an example of a text that relied too much on anecdotes and not enough on data, declaring it "very disappointing." We pressed him on this. Michel conceded the problem was less that it was too anecdotal and more that he disagreed with the book's premise—that high litigation costs were a sign the patent system wasn't working.
I don't know if Michel has ever spent any time around the startup community, but the vast majority of entrepreneurs I talk to would absolutely love to "use patents less." But they can't. Because there are all sorts of patent lawyers and trolls who get patents on all sorts of crap and then sue these companies. You can't just opt out. How the hell do you opt out of getting sued by a bogus patent troll?Judge Michel seemed unaware of the depth of the software industry's dissatisfaction with the patent system. He suggested the patent system's critics were relatively marginal figures not representative of the views of the broader technology industry. And he didn't seem to understand the dynamics of the patent arms race currently affecting the software industry.
"If software is less dependent on patents, fine then. Let software use patents less as they choose," Michel said. "If other industries are terribly dependent on patents, then let's not wreck the system just because software people are unhappy."
Rader and Michel's perspectives are likely skewed by the fact they spent their time on the bench surrounded by patent lawyers (who by definition work with firms that have the resources to hire patent attorneys). For the typical software-producing firm, patent lawyers are simply too expensive. Most firms never get patents, and they typically settle patent claims rather than taking them to court. As a result, Judges Michel and Rader rarely hear from smaller firms for whom the patent system is nothing but a burden.It would be nice if there were some way to teach judges about what's actually happening out in the world, rather than the very, very distorted view they get on the bench.
How long will it be until your entire dinner is covered by patents? A few months ago, we covered the unfortunate rise of vegetable patents, and now we need to worry about how we cut our meat as well? Kaden alerts us to a report about how some "meat processing specialists" have figured out a "new" way to cut a beef carcass to create a different cut of steak, which they're calling the Vegas Strip Steak. Not regularly reading about meat cuts, I have to admit that the article is somewhat amusing, concerning the vast enthusiasm about a different way to chop up a dead cow:
“Initially, the cut was labeled as undervalued,” Mata said. “Whenever we can take a muscle and turn it into a steak rather than grinding it or selling it as a roast, we are adding value to the carcass.”Of course, the actual details of how this particular steak is cut, however, are not revealed. Instead, the report notes that the folks behind it are awaiting a patent. A cursory glance over at the patent office suggests that the application was likely filed less than 18 months ago, as it has not yet been published (applications are only made public after 18 months). Thus, there is still a chance that the patent will be rejected for not being patentable subject matter. However, these days, you never know. All I do know is that it seems fairly ridiculous that the food on my dinner plate might violate a bunch of patents.
In the research and development phase, the Vegas Strip Steak was compared against the New York Strip, Petite Filet and Flat Iron Steak.
“This muscle produces a steak that is on par with or better than today’s most popular steaks,” Mata said.
Vegas Strip Steak attributes of tenderness, flavor and appearance appeal to consumers.
by Mike Masnick
Tue, May 15th 2012 2:53pm
Filed Under:
journalism, mediashift, paywall, pbs, steven brill
Companies:
financial times, new york times, press+
Last week, I went on PBS Mediashift's podcast to debate media mogul Steven Brill about the power of paywalls. Brill runs Press+, one of the first companies that built a business around setting up paywalls for publications. They focus on NYT/FT-like "metered" paywalls, where you get some content for free, but if you hit a certain number of pages, you're locked out unless you pay. Brill, whose company had to sell out to a much larger player recently (suggesting it's not as successful as he makes it out to be), insists during the episode that there is no way to make money giving away journalism content for free, and insists that advertising is no way to make money. You can hear our debate starting at around 18:45 on the podcast:
News that Harvard University is the latest to join the growing revolt against the exorbitant pricing of academic journals caused something of a stir recently -- although it has been pointed out that its case would be stronger if it followed its own advice and made the Harvard Business Review open access, or at least cheaper.
But here's an area where Harvard, together with MIT, is being more pro-active in helping to make knowledge more widely available online:
EdX is a joint partnership between The Massachusetts Institute of Technology (MIT) and Harvard University to offer online learning to millions of people around the world. EdX will offer Harvard and MIT classes online for free. Through this partnership, the institutions aim to extend their collective reach to build a global community of online learners and to improve education for everyone.
MIT's MITx platform already offers some MIT courses online, and is open source:
EdX will build on both universities’ experience in offering online instructional content. The technological platform recently established by MITx, which will serve as the foundation for the new learning system, was designed to offer online versions of MIT courses featuring video lesson segments, embedded quizzes, immediate feedback, student-ranked questions and answers, online laboratories and student-paced learning. Certificates of mastery will be available for those who are motivated and able to demonstrate their knowledge of the course material.EdX will release its learning platform as open-source software so it can be used by other universities and organizations that wish to host the platform themselves. Because the learning technology will be available as open-source software, other universities and individuals will be able to help edX improve and add features to the technology.
The hope is that other universities will join with Harvard and MIT to make EdX one of the primary platforms for online learning. Interestingly, it will also be used to research how people learn using digital technology -- and how it can be deployed more effectively:
MIT and Harvard will use the jointly operated edX platform to research how students learn and how technologies can facilitate effective teaching both on-campus and online. The edX platform will enable the study of which teaching methods and tools are most successful. The findings of this research will be used to inform how faculty use technology in their teaching, which will enhance the experience for students on campus and for the millions expected to take advantage of these new online offerings.
This looks like an important move for online learning, not least because of the scale of the financial support:
The initiative will be overseen by a not-for-profit organization based in Cambridge, Mass., to be owned and governed equally by the two universities. MIT and Harvard have committed to a combined $60 million ($30 million each) in institutional support, grants and philanthropy to launch the collaboration.
Those funds and the projects they will catalyze could boost efforts to make university courses more widely available, complementing the growing success of open access in opening up published materials.
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We keep hearing that these new business models and platforms really can't handle "big" projects. While part of the charm and power of these platforms is that they can fund smaller "long tail" projects that might never otherwise see the light of day, there's no reason that they can't do bigger projects as well. A few weeks ago, we told you about the Kickstarter campaign for the Pebble e-watch, which was the fastest growing Kickstarter project ever, surpassing $1 million in just 28 hours, and hitting $4.5 million by the time we got our post out.
Last week, the project surpassed $10 million and still had over a week to go. However, the folks behind the project had decided to cap the total number of watches that could be pre-sold via Kickstarter at a mere 85,000. So once that number was hit, they set the Kickstarter to show all the items sold out. While I could see some folks who were waiting towards the end get a little annoyed (thankfully, I got my order in a few days earlier), projects like this should at least open some eyes to the fact that Kickstarter is not just for small stuff. While some have argued that something like Kickstarter could never fund a Martin Scorcese film, remember Kickstarter is just three years old. If Scorcese set up an interesting project with cool tiers, I wouldn't be surprised to see it funded to massive levels.
by Leigh Beadon
Fri, May 11th 2012 6:34pm
Filed Under:
authors guild, espresso book machine, harvard bookstore, printing, scott turow
When Authors Guild boss Scott Turow said that brick-and-mortar stores are the future of book sales, it was hard not to laugh. Tim Cushing & I joined forces to supply him with an ad for his quixotic campaign, and as expected, defenders of the joy of printed books and brick-and-mortar bookstores appeared in the comments to sing their praises in a non-satirical fashion.
But the thing is, if people love bookstores, then bookstores will survive. But the market will inevitably scale according to demand—and there can be no doubt that demand is declining. I count myself among those who get a warm feeling from shopping in a nice independent bookstore full of mismatched shelves and handwritten signs, and I think that's what most people are pining for when they talk about bookstores, not big box retailers with display tables of pop-psychology books and extraneous Twilight supplements. The latter originally thrived on convenience, selection and price—and in those areas they have been rendered completely obsolete by online retailers. But the former subsist on community, personality and charm—things that can be accomplished online, but in a much different way that will never wholly replace a physical space, and that are not really a part of Amazon's arsenal. That doesn't change the fact that independent bookstores are struggling, or that many have shut down and many still will, but the impassioned defenses of the neighbouhood bookstore that pop up in every discussion of this topic show that there is absolutely still a market to be served, even if the size of that market is still uncertain.
There's an additional fear that even if stores offer a superior experience that keeps customers coming in the door, many of those customers will simply browse and then order the books online at a lower price, thus reaping the benefits of the small store without paying for them. I'm not sure how justified that is. People still like to leave a store with something in their hands—and if you build an engrossing retail space with a sense of community, where people interact with the books and each other, they won't be thinking about their smartphones or Amazon's superior prices. A bookstore can also go a step further: Jim O points us to the story of the Harvard Bookstore, where the new owner set up an on-demand printer/binder to see if he could leverage the opposite trend. People don't just shop physically then buy digitally—they also shop digitally and buy physically:
Maybe access to the vast universe of digital content could also save the bookstore. Maybe the bookstore, while limited in inventory, could evolve in the digital world and become a destination where people had access to every digitized book ever published.
To truly compete, he would also have to solve consumer’s expectations for instant gratification and delivery. Jeff needed a complete production, distribution, and fulfillment model. He has likely shocked a lot of people by building one in his own backyard.
Essentially, Jeff installed a printing press to close the inventory gap with Amazon. The Espresso Book Machine sits in the middle of Harvard Bookstore like a hi-tech visitor to an earlier era. A compact digital press, it can print nearly five million titles including Google Books that are in the public domain, as well as out of print titles. We’re talking beautiful, perfect bound paperbacks indistinguishable from books produced by major publishing houses. The Espresso Book Machine can be also used for custom publishing, a growing source of revenue, and customers can order books in the store and on-line.
You can walk into the store, request an out-of-print, or hard-to-find title, and a bookseller can print that book for you in approximately four minutes. Ben Franklin would be impressed.
I've been excited about the prospects of the Espresso Book Machine for a while. Though print is obsolete in many ways, a lot of people still like printed books and express distaste for e-readers. Personally I don't see myself ever giving up printed books entirely (or selling my small collection of antiques), but I also don't mind reading electronically—and unlike many print defenders, I don't condemn those who do truly make the switch. Print still has value to the end consumer, and as such it is not entirely obsolete as a product—but the incredibly wasteful system of printing off huge runs of books and shipping them thousands of miles is. On-demand printers could solve that paradox.
So how is it working out for the Harvard Bookstore? There are no firm numbers, but the owner reports double-digit sales growth monthly over the past year. Can every town and city support a store like this? Certainly not—nothing changes the fact that demand for bookstores has gone down, and it's naive for those who still love them to expect the market not to shrink accordingly. But the reverse is also true: as long as some demand exists, smart entrepreneurs can find ways to stay relevant and succeed.
by Mike Masnick
Fri, May 11th 2012 1:00pm
Filed Under:
bankruptcy, competition, innovation
Companies:
emi, mp3tunes, riaa
We've noted how frequently the entertainment industry -- especially the big record labels with the help of the RIAA -- seem to sue innovative upstarts. They usually do this as part of a two-part plan: they either want to kill off the innovation, or they use the lawsuit as the opening gambit in trying to get a big chunk of the equity of the startup (which they then stifle and kill). News broke recently that online music storage locker MP3Tunes, one of the first of its kind, filed for bankruptcy in large part due to the years-long legal attacks from EMI. The thing is, MP3Tunes basically won its case, showing that the basic service was completely legal. In fact, what MP3Tunes provides is basically the same service that Amazon and Google now offer with their music lockers. MP3Tunes was one of the pioneers in the space... and for its troubles, it gets sued into bankruptcy, despite being legal.
We keep hearing people insist that the record labels are adapting. And it's true that they've been pulled, kicking and screaming, into parts of the 21st century. But the second that anyone comes along doing anything remotely interesting and which provides real value, they freak out and sue. And it goes beyond that. As Robertson describes in his blog post about this, EMI apparently went to great lengths to destroy MP3Tunes, even if it was legitimate:
At every opportunity EMI dragged out the legal process making it costly and burdensome. One example is the interrogation of company employees in all-day inquisitions called depositions where attorneys try to trick people into making admissions. In our case, they deposed not just management but nearly everyone in the company all the way down to clerical help and customer support personnel. They even paid $25,000 to get an ex-employee to agree to a deposition. For management they deposed everyone - some multiple times with me getting deposed 3 separate times.As Robertson notes, fighting the legal battle was one thing, but blocking the company from partnering and building out its business was the really deadly part. Robertson, of course, has been outspoken in his criticism of the RIAA over the years, and has been through previous legal battles with them as well. In part, some of EMI's infatuation with this case appeared to be personally vindictive (they sued Robertson directly as well as the company). Whether or not MP3Tunes could have succeeded may be an open question. But it seems clear that the company had no chance at all given the barriers that EMI put in its place. Of course, during this same period we've witnessed the collapse and sale of EMI (in pieces) as well. Perhaps, instead of suing the innovations that would help move it into a modern digital era, it should have been looking for ways to embrace them.
The legal pressure was not just confined within MP3tunes. EMI sent legal demands to existing partners and potential partners were told they could not work with MP3tunes or risk losing their license to sell EMI music. More than one digital company told us they wanted to work with us, but were prohibited from doing so by EMI. They used their government-granted copyright monopoly to get MP3tunes blackballed in the industry.
EMI spent an estimated $10 million dollars with multiple law firms to arm their attack against MP3tunes in an attempt to thwart unlicensed personal lockers. They know it's difficult if not impossible for startups to fight long costly legal battles. Their hope is that the startup cannot fund a protracted legal battle and they win by default. This happened with the music search engine Seeqpod, Muxtape, Favtape and many others that have quietly faded away. They know that even if the digital upstart prevails in court, they will be terminally weakened. Veoh won multiple rounds of their copyright battle outright only to be forced into bankruptcy after spending $7 million on legal bills.
by Mike Masnick
Fri, May 11th 2012 3:01am
Filed Under:
canada, globe and mail, mathew ingram, news, paywall
Okay, this one's just for fun, but seeing that Canadian national newspaper the Globe & Mail has announced that it's following on the pointless trend of putting metered paywalls up for online publications, and announcing it like it's a big deal, we figured it might be nice to remind people that some (actually, er, most) online publications are still doing just fine publishing for free. But, if they can get news out of making life worse for their readers and community, why can't we make some news out of the fact that we like to treat our community right, and let them read our stuff for free, and freely share it and talk about it? I don't see how making life more difficult for readers, limiting them, demanding that they pay and letting them do less in terms of sharing the content will do much to make people more interested in the site. As for the claims that the Globe & Mail is struggling, as Globe alum Mathew Ingram points out, perhaps they shouldn't be building new office space...
Thu, May 10th 2012 4:27pm
Filed Under:
blu-ray, drm, dvd, free software magazine, hd, lib-ray, nina paley, terry hancock
Companies:
kickstarter
In most areas of entertainment, DRM is an option. If you want to publish an ebook, you don't have to use DRM. Same for video games and music. While these others areas of entertainment are moving away from DRM, there is one prominent holdout on the DRM front: movies. Every official distribution and streaming service for the movie industry has some form of required DRM. This includes streaming services such as Hulu and Netflix, download services like Amazon and iTunes, and even the physical media such as DVD and Blu-ray. According to the larger studios, DRM is a necessity, even though its effectiveness is questionable at best and customers hate it. But what about those studios that want to deliver a High Definition experience without the burden of DRM? What choices do they have? If all they want to do is allow people to stream or download the movie, they have plenty of options, but what if they want to include the full feature list available via Blu-ray?
This is one quandary that Terry Hancock of Free Software Magazine found himself facing a little over a year ago. He had been working on two films and wanted a High Definition feature rich experience without the hassle of Blu-ray DRM. He had looked at multiple options, many of which fell a little flat in the end. However, one stood out as the most reasonable option for what he wanted to do. He had to write his own open, DRM-free, HD video standard.
Thanks to Nina Paley, we learn that Terry has started a Kickstarter Campaign to help fund the creation of this open HD video standard called, Lib-ray. Terry describes the motivation behind this campaign as follows:
This may sound like a quixotic goal for a lone individual without corporate backing to develop, but most of the money spent on developing Blu-Ray was spent on the DRM technology -- meaning the technology to make it not play under certain circumstances. The actual business of getting menus and video to work is much simpler, and a lot of the work has already been done. So a format without DRM, based on open standards is intrinsically more attainable.Think about that. Designing DRM is designing ways in which your movie will not play. Why would anyone want to waste time and money on such an idiotic goal? You would think that movie producers would want people to watch their movies. This idea is what pushed Terry to this point. Why waste time and money on using a DRM'ed media like Blu-ray to release what he wants to be a free culture movie? Even if he tried to work around the DRM of Blu-ray, there is no guarantee that the movies would play in standard Blu-ray players and he would still have to deal with licensing issues.
by Glyn Moody
Wed, May 9th 2012 7:30pm
Filed Under:
development, injunction, innovation, software patents, supreme court
The damage that software patents cause to innovation in the computer world is a constant theme here on Techdirt. But as a fascinating new paper by James Boyle explains, the threat to open source, particularly from patent injunctions, is even greater because of the special characteristics of that software development methodology:
If open source innovation has great social benefits in fostering competition and innovation, it also has particular vulnerabilities. First, precisely because open source development takes place in a network and allows both small and large players to participate by building on a common technology, it is particularly susceptible to attack and disruption. A proprietary monopolist fully internalizes both the costs and benefits of policing its technology and its intellectual property. Members of an open innovation network, however, do not. Individual members can be "picked off," forced to abandon promising lines of technological development, or to pay ruinous "stacked" royalties because the costs of litigation are too burdensome for any one member of the network to bear. It is in this context that the threat of injunctions is particularly worrisome. In fast-moving technology markets, the dead stop forced by an injunction can be enough to doom a product. An entire network of innovation could be shut down by an injunction obtained against a single small participant who lacks the resources necessary to challenge the patent or defend against the injunction.
Boyle explores these great points at length in his paper, which is well-worth reading. He also offers some suggestions for ways in which the threat of patent injunctions against open source can be reduced thanks to a ruling by the Supreme Court, eBay, Inc. v. MercExchange, L.L.C, and the four-part test it introduced:
Second, most of these markets are characterized by strongly cumulative innovation. A finished product may "read on" literally thousands of potential patents.the Court held that permanent injunctions in patent law are governed by the same equitable four-part test as injunctions in other areas of law.
Boyle writes:
A plaintiff must demonstrate: (1) that it has suffered an irreparable injury; (2) that remedies available at law, such as monetary damages, are inadequate to compensate for that injury; (3) that, considering the balance of hardships between the plaintiff and defendant, a remedy in equity is warranted; and (4) that the public interest would not be disserved by a permanent injunction.
this Article argues the Supreme Court’s test in eBay, properly understood, offers some constructive ways to respond to both the benefits of open source innovation and the threats posed to it by injunctions. In particular, the third and fourth factors -- the "balance of hardships" component and the "public interest" component -- are ideally suited to allow recognition of the unique vulnerabilities and the unique competitive and innovative value of open source production.
As open source becomes more widely deployed, so the potential damage that software patents can cause to it grows. Boyle's paper is a timely reminder that judges need to take into account the special nature of open source when considering whether to grant patent injunctions if society as a whole is to benefit, and not just the patent holders.
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by Glyn Moody
Wed, May 9th 2012 10:42am
Filed Under:
activex, internet explorer, south korea, windows
Companies:
microsoft
The problems of monopolies arising through network effects, and the negative effects of the lock-in that results, are familiar enough. But it's rare to come across an entire nation suffering the consequences of both quite so clearly as South Korea, which finds itself in this situation thanks to a really unfortunate decision made by its government some years back:
At the end of the 1990s, Korea developed its own encryption technology, SEED, with the aim of securing e-commerce. Users must supply a digital certificate, protected by a personal password, for any online transaction in order to prove their identity. For Web sites to be able to verify the certificates, the technology requires users to install a Microsoft ActiveX plug-in.
The trouble is ActiveX is only supported on one platform: Microsoft Windows. As a result, when the South Korean government made the technology mandatory for online e-commerce, the entire South Korean Internet sector become enslaved to Internet Explorer:
It forced consumers to use Internet Explorer because it was the only browser ActiveX plug-ins were compatible with. By default, Web developers optimized not only banking and shopping Web sites for Internet Explorer, but all Web sites. For developers, this just seemed logical.
The result has been a decade-long monopoly in the Korean market, where virtually all Korean Web sites are optimized for Internet Explorer.
Eventually, the South Korean government noticed that it was totally out of step with the rest of the world in effectively forbidding important alternative technologies like iPhones or Android, and took steps to remedy the situation:
A bylaw was created that said government Web sites must accommodate at least three different Web browsers and in 2010 they withdrew the mandate governing the use of ActiveX plug-ins.
So even though the possibility of using something other than ActiveX is there, in practice there are simply no other options for secure transactions. A choice taken a decade ago to standardize on one technology has locked an entire nation into that platform, and it's proving extremely hard to escape.
But there was a catch.
If a company wants to stop using ActiveX plug-ins, it has to use an alternative technology that offers the same level of insurance. To get approval to use such a technology, they have to get approval from a government appraisal committee. The committee was formed over a year ago and has yet to make a single approval.
And it's not just the local coders that are suffering: businesses, too, are hamstrung when it comes to innovation. As Kim Kee-chang, founder of the OpenWeb organization dedicated to expanding Web accessibility in Korea, explained:
"If people are thinking of opening up some service ultimately connected to payment they really have no chance in Korea," Kim said. "They are stuck in the payment stage and even if they could make it in Korea, they'd have little hope in an international market."
It's a classic lock-in due to network effects, aided and abetted by a thoughtless government decision all those years ago. As South Korea falls further and further behind in this regard, trapped in its fossilized world of ActiveX, it may well come to be seen as warning to other governments to adopt true open standards, if they want to avoid a similar fate.
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by Mike Masnick
Tue, May 8th 2012 7:31pm
Filed Under:
competition, design, monopoly, thermostats
Companies:
honeywell, nest labs
I'd been meaning to write about this lawsuit ever since it was filed, but other stuff got in the way, so this is a bit of a catch-up post, to go along with Honeywell's response to Nest's counterclaims (which we'll get to in a bit). But the key to this highly questionable lawsuit is that electronics giant Honeywell wants to use the patent system to effectively kill off the well-hyped Nest thermostat. Nest, a company that launched just last fall, got some well-deserved attention for applying an Apple-like design sense to everyday gadgets -- starting with the lowly thermostat, a device that really hasn't seen that much innovation in quite some time. The product was, indeed, a pretty big leap forward, and I know a bunch of people who have Nest devices and love them.
But, of course, under a crony capitalist system, the incumbents can't have any of this nasty "disruption." Honeywell was not pleased. Bizarrely, just days before Honeywell filed the lawsuit, it had told GigaOm that it had built something similar to Nest but killed it off because consumers weren't interested. Yeah, this certainly sounds like a company jealous that Nest actually figured out how to truly innovate (bring something to market in a way consumers want) rather than just invent (create something new).
The simple fact here is that consumers really seem to like the Nest, and apparently Honeywell is ill-equipped to compete in the marketplace. So it's response is to sue and try to kill off the competition. It's a sickening display of a legacy company resting on its laurels afraid to actually compete in the market against a disruptive player that's younger and nimbler and actually in touch with what consumers want. Out of this, we get some absolutely ridiculous claims, such as the suggestion that Honeywell has patented the idea of a thermostat asking you what temperature you like, and only Honeywell could do such a thing:
This lawsuit is a bald effort by Honeywell to inhibit competition from a promising new company and product in a field that Honeywell has dominated for decades. Nest Labs, with its Nest Learning Thermostat, has generated consumer and critical enthusiasm around the home thermostat -- a device that most people had long since written off as a bland, dumb appliance.... That "blah-looking controller" on the market today is very often from Honeywell, which has long dominated the thermostat market, but has yet to generate a device that offers ordinary consumers as much as the Nest Learning Thermostat. Instead of countering product innovation with its own new products, Honeywell has a track record of responding to innovation with lawsuits and overextended claims of intellectual property violations.Nest also points out that Honeywell has lost previous lawsuits that similarly appeared to be bullying competitors. The Nest response doesn't just call out the company for what it's obviously trying to do, but further claims that all of the patents are "hopelessly invalid" and points to prior art that raises significant questions about the validity of the patents in play.
As some people know (my colleagues at work are sick of me talking about it), I recently became slightly... er... obsessed with the wonders of shaving with an old fashioned double edge safety razor. I won't go into the details, but in reading about shaving with such a device, I couldn't get it out of my mind and have been happily shaving with one for a few weeks now. To be honest, I never thought that I'd ever have reason to mention this in any way, shape or form on Techdirt, but just weeks after I started using one, I saw Stephan Kinsella point to a story by Callum Makkai entitled How Intellectual Property Destroyed Men's Shaving. Given my (entirely separate) interest in both subjects, I dug in. It kicks off with a reference to Andy Kessler's Eat People story about King Gillette's disruptive manufacturing of disposable blades that "challenged at least two professions: the barber with his straight razor and the blade sharpener with his strop."
From there, however, Makkai suggests patents have actually been making shaving worse. His argument is that as the makers of shaving equipment have been fearful of competing with commodity products, they keep "inventing" new ways to shave that they can lock up under patent -- and then try to convince you that it creates a better shave, even if none of the "improved" razors come close to one of those old safety razors:
The commodification of the razor blade was punishing to the profit margins of the razor companies. So the way ahead was clear: come up with new designs, patent them, and make a killing selling the disposable blades.Admittedly, this is a bit of a cynical view on things. And one could make the argument that this isn't so much about patents as it is about marketing -- though it could be a combination of both. Frankly, the story reminds me of what we see all too often in the pharmaceutical world these days -- where when Claritin is about to go off patent, suddenly we get Clarinex, with an associated marketing campaign about how you have to use that rather than the original (much cheaper and equally effective) Claritin. Of course, if people didn't fall for the marketing campaigns, none of this would matter -- but they do. So combine that with the ability to charge monopoly rents due to patents, and voila, many of you are getting a crappy shave, despite the ten blades or whatever they're shoving on those darn cartridges these days. We should always be wary when life imitates The Onion, and wonder if, perhaps, the incentives are screwed up somewhere along the line.
Thus the 1970s saw the emergence of the BIC disposable razor. Why replace just the blade when you can throw out and replace the whole razor?
Then in the 1980s, Gillette introduced the double-bladed Sensor cartridges. Now the question was: Why throw out the whole razor when you can just replace the cartridge?
Needless to say, these innovations were driven not so much by an improvement of the shaving experience but by the need to create a technology which could be patented.
Indeed, the injector razor did not improve the shaving experience compared to the classic double-edged safety razor, and the disposable razor was in no way superior to the injector razor. Likewise, the Sensor cartridges did not improve on the disposable razor. These developments only made shaving more expensive.
by Mike Masnick
Mon, May 7th 2012 7:19am
Filed Under:
contentid, hollywood, vcr
Companies:
megaupload, mpaa, viacom, youtube
When the Betamax/VCR first came out, Hollywood insisted that it was pure evil and that it would be "the Boston Strangler" to the movie business. And, if you looked at how the devices were used at first, you could easily argue that the vast, vast majority of the usage was, in fact, infringing. In part, that was because the movie studios were so freaked out about such devices, they couldn't even comprehend offering licensed movies for home viewing at the time. Instead, the device was purely about "theft." Of course, after a drawn out trial, the Supreme Court (very closely) came down in favor of the VCR, and said that because it had substantial non-infringing uses, it was legal. Just a few years after that, the home video market for the major Hollywood studios was so large, that it was widely claimed that the VCR saved Hollywood, rather than killing it.
This story is not a unique one. We seem to see the same thing with every disruptive technology that old guard entertainment firms can't comprehend. When radio was introduced it was declared that it would kill the music industry. The RIAA worked hard to have the MP3 player declared illegal.
It happens over and over again -- and each and every time, soon afterwards, new markets emerge, new opportunities become abundantly clear, and the platform that was supposedly pure evil and bent on the destruction of the industry turns out to be a huge new revenue base and opportunity, usually providing revenue in ways that simply weren't possible before that new technology came along.
It sure looks like the same exact thing is happening with YouTube. As you probably know, Viacom is still engaged in a drawn out lawsuit against YouTube over many thousands of clips that Viacom insists were infringing and a massive blight on its bottom line.
And yet... because YouTube had the time to develop, something interesting has been happening. By now you're hopefully all familiar with ContentID. While it has its quirks and issues, one thing that is clear is that it's become a tremendous source of revenue for content creators to monetize works uploaded by others. But it's not just others. NPR has a story about how the major MPAA Hollywood studios -- including Viacom -- are now profiting nicely by purposely uploading all sorts of clips from their various movies, knowing that people are searching for and watching key moments... which they can monetize:
Oh, and the fun part: she gets to watch movies, pick the most memorable moments, and upload those clips to YouTube. Today, it's L.A. Story.This is a company that all the big MPAA studios are hiring to go out, find these clips in their own movies, and upload them (and then do things to get them to the top of Google searches). Apparently, it's quite lucrative for the studios. Of course, what's funny is that the same people who are now celebrating this new revenue stream are also the ones who just a few years ago insisted not only that YouTube was illegal, but that it was dead, because no money could be made from it. But, somehow, these things have a way of working themselves out if they're allowed to do so.
"We always pick a clip that has a beginning, middle and an end," says Strickland, pointing out the various fields she has to fill out in the content management system before she uploads a clip to YouTube. "I put everyone that's in the scene: so Steve Martin, Richard Grant, Victoria Tennant, Sarah Jessica Parker, I put some of the memorable dialogue — 'SanDeE your breasts feel weird, oh, that's because they're real' — then you put discussion topics, character types, settings, eras, what they're doing."
It consists of hours of tedious work to ensure this licensed content will show up first when you go searching for your favorite movie clip on YouTube. Not an easy task when 60 hours of video are uploaded to YouTube every minute.
by Michael Ho
Thu, May 3rd 2012 5:00pm
Filed Under:
education, edutainment, essays, games, peter diamandis, teaching, x prize
Companies:
hewlett foundation, kaggle
Great teachers aren't exactly a plentiful resource, but the market for teachers hasn't quite minted many millionaires from the scarcity. But maybe that will change soon. There are a bunch of projects that are aiming to create innovative educational tools, and some of these efforts could be hugely profitable in the future. Perhaps those who can, will teach.
by Mike Masnick
Thu, May 3rd 2012 9:38am
Filed Under:
chris dodd, edison, hollywood, intellectual property, mpaa
Ah, Chris Dodd. Can you open your mouth without saying something ridiculously misleading? Sometimes, it doesn't seem possible. The latest is that he's claiming that strong IP laws were the reason Hollywood was created:
The truth is that neither the content nor the technology industries could survive without strong protections for intellectual property.Of course, that's all hogwash. Well, in a very twisted way, he's right. Hollywood did come about because of strong patent protection, but not the way Dodd seems to be suggesting. Instead, the reason that filmmakers moved out to Hollywood was because it was about as far away as they could get from Thomas Edison, who held the patents on basic filmmaking technology, and demanded exorbitant licensing fees. So the main reason that Hollywood is in Hollywood is because they were seeking a place to hide from patents.
Many of you are familiar with how the name Hollywood became synonymous with the birth of the American film industry. It was in Jacob Stern’s horse barn, at the corner of Hollywood and Vine, the story goes, that Cecil B. DeMille screened the first full length feature film 100 years ago.
Well, when it comes to the tech sector, replace “Jacob Stern’s horse barn” with “Mark Zuckerberg’s dorm room” at Harvard, and you have almost the same story with the birth of Facebook.
In these and countless other examples throughout our history, the ability to give birth to an idea and convert it into economic success, whether it is the content of a film or the technology of the internet, depends on copyright and patent protection
It would be something of an understatement to say that the world of public libraries is undergoing rapid change at the moment. On the one hand, the rise of open access means that people are increasingly able to find information online that was formerly held in serried ranks of volumes stored on library stacks. On the other, publishers' reluctance to allow ebooks to be lent out puts a key traditional function of libraries under threat. So what exactly should public libraries being doing in the digital age? Eric F. Van de Velde has written a a fascinating exploration of that question, along with a few suggestions.
Here's the central problem:
The value propositions of paper-based and digital lending are fundamentally different. A paper-based library builds permanent infrastructure: collections, buildings, and catalogs are assets that continue to pay dividends far into the future. In contrast, resources spent on digital lending are pure overhead. This includes staff time spent on negotiating licenses, development and maintenance of authentication systems, OpenURL, proxy, and web servers, and the software development to give a unified interface to disparate systems of content distributors.
This means:
Libraries need a different vision for their digital future, one that focuses on building digital infrastructure. We must preserve traditional library values, not traditional library institutions, processes, and services.
So how might that work in practice?
By gradually converting acquisition budgets into grant budgets, libraries could become open-access patrons. They could organize grant competitions for the production of open-access works. By sponsoring works and creators that further the goals of its community, each library contributes to a permanent open-access digital library for everyone. Publishers would have a role in the development of grant proposals that cover all stages of the production and marketing of the work. In addition to producing the open-access works, publishers could develop commercial added-value services. Finally, innovative markets like the one developed by Gluejar allow libraries (and others) to acquire the digital rights of commercial works and set them free.
That's an exciting vision, because it turns libraries into active participants in the creation and propagation of knowledge that is universally available through open access, instead of simply lending out the productions of others, without any real ability to apply the huge store of knowledge librarians have acquired about what their users want. It's particularly encouraging that this is not just a plea for more funds -- unlikely to be heeded in the current economic climate -- but a simple if revolutionary call for a better use of those that are already available.
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by Michael Ho
Wed, May 2nd 2012 5:00pm
Filed Under:
fabric, kevlar, material, silkworms, spider silk, steel
For years, researchers have been looking at spider silk's properties to try to re-create it into supermaterials tougher than Kevlar or steel. We're still learning a lot about how spider silk is made and what its structures are, so it'll probably be a few more decades before everyone is wearing clothes made from spider silk. In the meantime, here are a few interesting articles on spider silk.
by Mike Masnick
Fri, Apr 27th 2012 5:33pm
Filed Under:
economics, externalities, jacking society, spillover
Companies:
amazon, apple, craigslist, facebook, flipboard, google
As I discussed in my Hacking Society post, one of the things I'm thinking a lot about these days is how to measure value that isn't directly monetized. There's a related aspect to all of this, as well: recognizing that when you create value, you don't have to monetize all of it directly yourself. Historically, in economics, they've talked about things like "externalities" and "spillovers" when discussing parts of the economic value chain that can't be controlled or monetized directly. However, it seems like a growing number of economists are realizing that this undersells what's happening. Externalities and spillovers often feel like a small thing -- a tangential bit tossed off to the side. But when you're dealing with information and digital goods, it's important to recognize that these things can be a major part of the market, and may not be controllable at all. And that may be a good thing.
In the discussion we had about Craigslist, one of the points was that while Craigslist itself only "captures" a small part of the value it's unleashed, that's not necessarily bad. First, it's good because much of that value to go out to the users of Craigslist themselves. That's why they appreciate and use Craigslist in the first place. If Craigslist tried to capture all of that value itself, people would stop using Craigslist. Now some may argue it becomes a different situation when you have third parties monetizing some of that value, but I disagree. When you look at the most successful companies in the world, they're often platforms -- they create value and capture some of it, but also allow much of that value to be monetized by others.
Look at Microsoft, Apple, Google and Facebook. All of them created a massive amount of value -- and all have become phenomenally successful companies -- but all of them did so by also letting others monetize large portions of the value they created. It's how you build a more long-lasting ecosystem from which you can continue to profit from over time. If you seek to capture all of the value yourself, you don't last very long.
I got to thinking about this more, after hearing the CEO of The Economist (who, one would hope, would understand these economic concepts) complaining about Flipboard capturing some of the value The Economist creates, and declaring it a "competitor" to The Economist's own digital and app ambitions.
“But you’re heading down a route we’ve seen before – giving the opportunity to extract value to somebody else in an area that should be our own – so Flipboard is problematic.”Of course, that ignores the fact that Flipboard -- an aggregator app -- provides its own value as well. People don't use Flipboard just because it includes content from The Economist. They use it because of the overall experience and the fact that it aggregates content from lots of different sources in one place. As much as The Economist, or any publication, might like to "own" the reader, that's not necessarily what the reader wants. Letting others "extract" some of that "value" can actually be a really good thing. Flipboard provides a useful service for The Economist in not only experimenting with new ways to aggregate and present content -- from which The Economist can learn -- but also in potentially expanding The Economist's audience as well, feeding much greater value back into that ecosystem.
Explore some core concepts:
