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<title>Techdirt. Stories filed under &quot;innovation&quot;</title>
<description>Easily digestible tech news...</description>
<link>http://www.techdirt.com/</link>
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<image><title>Techdirt. Stories filed under &quot;innovation&quot;</title><url>http://www.techdirt.com/images/td-88x31.gif</url><link>http://www.techdirt.com/</link></image>
<item>
<pubDate>Wed, 15 May 2013 17:00:00 PDT</pubDate>
<title>DailyDirt: New Models For (Not) Funding Science?</title>
<dc:creator>Joyce Hung</dc:creator>
<link>http://www.techdirt.com/articles/20110315/12411713502/dailydirt-new-models-not-funding-science.shtml</link>
<guid>http://www.techdirt.com/articles/20110315/12411713502/dailydirt-new-models-not-funding-science.shtml</guid>
<description><![CDATA[ In lean times like these, it's getting tougher to get funding for science and technology research, especially for innovative but high-risk ideas. It's no surprise that both the government and the private sector seem to feel more comfortable investing their money in more conservative "sure thing" efforts these days. While the scientific funding system is far from perfect, some of the attempts to "fix" it are making it even worse. Here are just a few (good and bad) examples.

<ul>

<li> <a title="http://www.slate.com/blogs/bad_astronomy/2013/05/13/canada_and_science_nrc_will_now_only_do_science_that_promotes_economic_gain.html" href="http://slate.me/10wToWN">Canada's scientific research and development agency, the National Research Council, has announced that it will now only conduct research that has "social or economic gain."</a> Apparently, the President of the NRC actually said, "Scientific discovery is not valuable unless it has commercial value." Unfortunately, that's one giant leap backwards for mankind. [<a href="http://www.slate.com/blogs/bad_astronomy/2013/05/13/canada_and_science_nrc_will_now_only_do_science_that_promotes_economic_gain.html">url</a>]</li>

<li> <a title="http://news.sciencemag.org/scienceinsider/2013/04/us-lawmaker-proposes-new-criteri-1.html" href="http://bit.ly/103bpQZ">U.S. House of Representatives chair Lamar Smith (R-TX) is proposing to replace the National Science Foundation's peer review process with a new set of funding criteria chosen by Congress.</a> Smith's "High Quality Research Act" would require the NSF to judge grants based on three criteria -- that the research will: advance national health, prosperity, welfare, and security; solve problems that are important to society at large; and not duplicate other research projects being funded by the government. [<a href="http://news.sciencemag.org/scienceinsider/2013/04/us-lawmaker-proposes-new-criteri-1.html">url</a>]</li>

<li> <a title="http://blogs.scientificamerican.com/guest-blog/2012/04/17/breakout-labs-a-new-model-for-funding-science-and-technology/" href="http://bit.ly/10wTuxD">On a more positive note, the Thiel Foundation's Breakout Labs is aiming to change the way early-stage science is funded.</a> Their grants of up to $350,000 over 1-2 years will enable startups to chase some risky ideas with groundbreaking potential, returning a small percentage of any commercial success back to Breakout Labs to help fund the future ventures. [<a href="http://blogs.scientificamerican.com/guest-blog/2012/04/17/breakout-labs-a-new-model-for-funding-science-and-technology/">url</a>]</li>

</ul>

If you'd like to read more awesome and interesting stuff, check out this unrelated (but not entirely random!) <a title="http://www.stumbleupon.com/to/stumble/stumblethru:www.techdirt.com" href="http://bit.ly/fagV8c">Techdirt post</a> via StumbleUpon.<br /><br /><a href="http://www.techdirt.com/articles/20110315/12411713502/dailydirt-new-models-not-funding-science.shtml">Permalink</a> | <a href="http://www.techdirt.com/articles/20110315/12411713502/dailydirt-new-models-not-funding-science.shtml#comments">Comments</a> | <a href="http://www.techdirt.com/articles/20110315/12411713502/dailydirt-new-models-not-funding-science.shtml?op=sharethis">Email This Story</a><br />
 ]]></description>
<slash:department>urls-we-dig-up</slash:department>
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<item>
<pubDate>Wed, 15 May 2013 11:43:00 PDT</pubDate>
<title>The McCain Cable Bill Can Only Do So Much; Real Change Is Market-Driven</title>
<dc:creator>Leigh Beadon</dc:creator>
<link>http://www.techdirt.com/blog/innovation/articles/20130513/21331623075/cable-a-la-carte.shtml</link>
<guid>http://www.techdirt.com/blog/innovation/articles/20130513/21331623075/cable-a-la-carte.shtml</guid>
<description><![CDATA[ <p>
There's a lot of buzz about Sen. John McCain's proposed <a href="https://s3.amazonaws.com/s3.documentcloud.org/documents/700540/tv-consumerfreedomact2013.pdf" target="_blank">Television Consumer Freedom Act</a> (pdf and embedded below), a bill designed to <a href="http://business.time.com/2013/05/10/john-mccain-wants-to-lower-your-cable-bill/" target="_blank">encourage cable companies to unbundle the TV stations they offer</a>, and <em>force</em> the networks to do the same. It also takes away the weak bargaining chip that some networks have attempted to <a href="http://www.techdirt.com/articles/20130501/19380322911/cbs-says-it-could-move-to-cable-few-days-if-aereo-wins-receives-several-offers-to-help-pack-its-bags.shtml">play</a> against Aereo, in which they threaten to pull their broadcasts from the open air, by making them sacrifice broadcast licenses in order to do so.
</p>
<p>
Everyone on the consumer side agrees that they'd <em>like</em> to have <em>&agrave; la carte</em> choices from cable companies, but beyond that there's no shortage of debate as to how effective the bill is likely to be and whether the end result would actually be any better for those consumers. The television market is badly distorted at all levels by monopoly interests and those whiffs of not-quite-collusion by groups of companies with a shared interest in maintaining the status quo, but is this bill capable of overcoming that? And is the practice of bundling really at the heart of the problem, or just a good public face for the deeper issues?
</p>
<p>
This is hardly the first attempt to stop the practice at either the network or cable provider level. Some courts have <a href="http://www.techdirt.com/articles/20120403/02585818343/appeals-court-bundling-cable-channels-together-isnt-anticompetitive.shtml">already found</a> bundling by cable providers to be legal and not anticompetitive; meanwhile Cablevision is currently pursuing an antitrust suit <a href="http://www.techdirt.com/articles/20130226/15114522124/cablevision-files-antitrust-suit-against-viacom-forced-bundling-crappy-tv-channels.shtml">against Viacom</a> for the network's bundling of stations that it sells to providers. Most of the details of the latter are under seal, but one notable point is Viacom's claim that it already offers channels individually, they just cost way more. If that's true of all Viacom's content, then it wouldn't be affected by McCain's bill anyway, which still permits bundling as long as there is an <em>&agrave; la carte</em> option.
</p>
<p>
And even if it's not true, it just underlines the core problem of this approach: the bill doesn't give networks any reason to make individual channels affordable or desirable. They either already offer an expensive <em>&agrave; la carte</em> menu that nobody orders from, or they could easily do so. Moreover, it's not as though the justification for bundling offered by the networks is completely falsified: they can spend more money on niche channels and programs by subsidizing them with the revenue from more broadly popular fare. Of course, it's not as though that justification isn't exaggerated and twisted to suit their needs either, nor is it true that the same fundamental idea couldn't exist without bundling. Networks get more value from niche programs than just transmission fees: they care about audience reach, brand-building, competing with other forms of content, accumulating accolades for prestige shows and even, believe it or not, making good television. There's no reason their businesses could not be structured to continue subsidizing niche programming with popular programming in a slightly less direct manner.
</p>
<p>
So the final solution, as always, needs to be found in the market &mdash; and that's already happening. Basically every single noticeable trend in media consumption habits, not just in television but in music and publishing and every format, points towards a more <em>&agrave; la carte</em> world. It's not news that the networks and cable providers have dragged their heels on this in the hope of milking their incumbent position a bit longer, nor is it news that they are privately a lot more freaked out by the cord-cutting movement than their public statements admit. Ultimately, it will be <em>consumers making choices</em> that force these companies to either adapt or perish.
</p>
<p>
But for that to happen, innovators do need to be able to actually give the consumers those choices. If the market has become so badly distorted that innovators are being locked out, then legal action and new laws <em>are</em> needed. And that's why the aspect of the bill that is likely to be the most effective (not to mention the most interesting) is the way it all seems to come back to Aereo.
</p>
<p>
The fight that Aereo started sits at the core of almost everything in the bill. Network owners don't like Aereo because they don't want to lose their retransmission fees from cable providers. Cable providers don't like Aereo because they don't want to lose the appeal of the major networks which, despite the ascendence of cable channels, still sit at the core of their service bundles &mdash; and because, generally, they don't want cord-cutters to have more options. McCain's bill basically says: Aereo or no Aereo, consumers need choices, and they're going to get them, whether you like it or not.
</p>
<p>
Is it a worthwhile step? Yes &mdash; or, at least, it's hard to see how it could do any harm, even if it does prove ineffectual. Is it the best approach? No. It almost feels like a bet on Aereo's failure. If Aereo were permitted to innovate, rather than being forced to jump through endless technological hoops and still spend more time in court than in the workshop or the boardroom, then the market would already be giving consumers what they want and pushing the networks and cable providers to become more competitive. If there is to be legal reform, it shouldn't be another layer of conditions and caveats on broadcast licenses and the retransmission fee structure that attempts to force the hand of the networks and cable companies, it should be a clarification (and probably a relaxation) of the rules, removing the legal and regulatory uncertainty that holds disruptive startups back. Television doesn't need a <em>Consumer</em> Freedom Act &mdash; consumers already have lots of freedom, they just don't have many choices in how they exercise it. The heart of McCain's bill is in the right place, but a Television <em>Innovator</em> Freedom Act is what we really need.
</p><br /><br /><a href="http://www.techdirt.com/blog/innovation/articles/20130513/21331623075/cable-a-la-carte.shtml">Permalink</a> | <a href="http://www.techdirt.com/blog/innovation/articles/20130513/21331623075/cable-a-la-carte.shtml#comments">Comments</a> | <a href="http://www.techdirt.com/blog/innovation/articles/20130513/21331623075/cable-a-la-carte.shtml?op=sharethis">Email This Story</a><br />
 ]]></description>
<slash:department>it's-innovators-who-need-freedom</slash:department>
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<pubDate>Tue, 7 May 2013 08:57:42 PDT</pubDate>
<title>Over 90% Of The Most Innovative Products From The Past Few Decades Were NOT Patented</title>
<dc:creator>Mike Masnick</dc:creator>
<link>http://www.techdirt.com/blog/innovation/articles/20130502/10513922919/over-90-most-innovative-products-past-few-decades-were-not-patented.shtml</link>
<guid>http://www.techdirt.com/blog/innovation/articles/20130502/10513922919/over-90-most-innovative-products-past-few-decades-were-not-patented.shtml</guid>
<description><![CDATA[ We've pointed out over and over and over again that patents are not a proxy for innovation.  In fact, there's little to connect the two at all, except potentially for how patents can <i>hinder</i> and hold back the pace of innovation.  A new study really helps to drive home how little patents have to do with innovation.  Pointed out to us <a href="https://twitter.com/JamesBessen/status/328459554528587777" target="_blank">by James Bessen</a>, the study looks at "R&#038;D 100 Awards" from the academic journal, <i>Research &#038; Development</i> from 1977 to 2004.  As you might expect, the R&#038;D 100 Awards are given out each year by the journal in an attempt to name the top 100 innovations of the year.  If patents were instrumental in driving innovation, you'd certainly expect most of these innovations to be patented.
<br /><br />
But you'd be wrong, as the reports authors, Roberto Fontana, Alessandro Nuvolari, Hiroshi Shimizu and Andrea Vezzulli, quickly discovered.
<br /><br />
A stunning <a href="http://ideas.repec.org/p/ise/isegwp/wp092013.html" target="_blank"><i>91%</i> of all of the technologies receiving the prize were not actually patented</a>.  That's covering approximately 3,000 technologies winning this award as the most innovative advancement of the year over a period of about three decades.  What's interesting to me is that this actually matches very closely with one of my favorite studies on patents, from economist Petra Moser, who looked at <i>historical</i> patenting rates from the 19th century using data on products displayed at the Crystal Palace exhibition of 1851 and the Centennial
exhibition in Philadelphia in 1876, which against showed very few of the "economically useful" inventions were patented.  Over 80% were not patented.  Of course, you might think that back in the 1800s there was less interest in patenting, but this new study suggests a rather similar rate to what Moser found from 150 years ago.
<br /><br />
The R&#038;D 100 certainly seems to be a good way to look at key innovations.  It's judged by a distinguished panel of experts, looking at two key criteria: i) technological significance (i.e., whether the product can be considered a major breakthrough from a technical point of view); ii) competitive significance (i.e., how the
performance of the product compares to rival solutions available on the market).  Both of these would seem like significant indicators of innovation.  And, as the authors note, many big innovations can easily be found on the list:
<blockquote><i>
Throughout the years, key breakthroughs inventions such as Polacolor
film (1963), the flashcube (1965), the automated teller machine (1973), the halogen lamp (1974), the
fax machine (1975), the liquid crystal display (1980), the printer (1986), the Kodak Photo CD (1991),
the Nicoderm antismoking patch (1992), Taxol anticancer drug (1993), lab on a chip (1996), and
HDTV (1998) have received the prize.
</i></blockquote>
Tellingly, even to apply for the award, innovators have to show just how much the innovation was an improvement on what else was available on the market,  They have to submit a "competitive matrix" showing this.  In other words, these prize-winning innovations tend to be actual innovations in the market that drive the state of the art forward.  You could suggest that they are innovations that truly "promote the progress," as (unlike our patent system) to get this award you literally have to show how the innovation promotes further progress.
<br /><br />
As you can see from the key findings, very, very little of the innovations that won the prize was also patented either three years before or three years after the prize was awarded:
<center>
<a href="http://imgur.com/QO1jSbp"><img src="http://i.imgur.com/QO1jSbp.png" width=560/></a>
</center>
Even when you take out "non-corporate" innovations (which have less propensity to be patented), looking at corporate only innovations over 87% were not patented.
<br /><br />
Of course there are some differences depending on what industry the innovation happened in, as well as where the innovation was originated.  The researchers broke down all of that information as well:
<center>
<a href="http://imgur.com/5KLtEey"><img src="http://i.imgur.com/5KLtEey.png" width=560/></a>
</center>
As you can see, the US actually has a lower patenting rate than Europe and Asia for the most part, which runs counter to the narrative often being told about how the US's leads the world with our patent system, and that Asian innovators have less respect for patents.  Though, on that point, the researchers note that most of the patents in the "Asian" section are Japanese, so it's possible that other countries in Asia, mainly China (along with known tech hubs Taiwan, Hong Kong and Singapore) do, in fact have a much lower propensity to patent.
<br /><br />
Of course the point that stood out as most interesting to me was the very low rate of patenting in the "chemistry" industry.  This covers pharmaceuticals as well.  And, of course, we're always told that this industry really "needs" patents because of the ease of copying as compared to the cost of innovating.  That doesn't seem to be supported by the data at all.  Yes, it's the highest percentage patented in the US, but still only 14% of such innovations are patented in the US.
<br /><br />
All in all, this is a really interesting paper and a significant contribution to the discussion over whether or not patents are really a good judge of innovation.  It would seem from the data available that the answer is a very loud "no."  In fact, it would appear that very few of the most significant and important innovations are being patented.  That should, at the very least, raise considerable questions concerning those who argue that our patent policy is necessary to encourage innovation, or those who argue that numbers from the patent system are a good judge of innovation.<br /><br /><a href="http://www.techdirt.com/blog/innovation/articles/20130502/10513922919/over-90-most-innovative-products-past-few-decades-were-not-patented.shtml">Permalink</a> | <a href="http://www.techdirt.com/blog/innovation/articles/20130502/10513922919/over-90-most-innovative-products-past-few-decades-were-not-patented.shtml#comments">Comments</a> | <a href="http://www.techdirt.com/blog/innovation/articles/20130502/10513922919/over-90-most-innovative-products-past-few-decades-were-not-patented.shtml?op=sharethis">Email This Story</a><br />
 ]]></description>
<slash:department>patents-are-not-a-proxy-for-innovation</slash:department>
<wfw:commentRss>http://www.techdirt.com/comment_rss.php?sid=20130502/10513922919</wfw:commentRss>
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<pubDate>Mon, 6 May 2013 14:43:00 PDT</pubDate>
<title>Chile Says It Does Not Recognize The Legitimacy Of The USTR's Special 301 Report</title>
<dc:creator>Mike Masnick</dc:creator>
<link>http://www.techdirt.com/articles/20130505/23161522956/chile-says-it-does-not-recognize-legitimacy-ustrs-special-301-report.shtml</link>
<guid>http://www.techdirt.com/articles/20130505/23161522956/chile-says-it-does-not-recognize-legitimacy-ustrs-special-301-report.shtml</guid>
<description><![CDATA[ For many years we've wondered why countries bend over backwards to stay in the US's good graces concerning the infamous "Special 301" report, put together by the USTR.  The list has no objective methodology at all.  Instead, companies send their complaints to the USTR, and the USTR <strike>launders</strike> rewrites those complaints and puts certain countries on the "naughty" list.  Back in 2007, Canada explicitly announced that <a href="http://www.parl.gc.ca/HousePublications/Publication.aspx?DocId=2806944&#038;Language=E&#038;Mode=1&#038;Parl=39&#038;Ses=1#T1150" target="_blank">it did not recognize</a> the legitimacy of the list, by saying:
<blockquote><i>
Canada does not recognize the 301 watch list process. It basically lacks reliable and objective analysis. It's driven entirely by U.S. industry. We have repeatedly raised this issue of the lack of objective analysis in the 301 watch list process with our U.S. counterparts.
</i></blockquote>
And we've wondered why other countries do not do the same.  When I was in Spain last week, a reporter I spoke to kept asking about the Special 301 list, as it seemed to be such a key concern for people there, and I noted that more countries should do what Canada does.  I realize that there are other issues there, and Canada knows that the US isn't likely to create a trade war over the list, but it still seemed odd how seriously some other countries take the list.
<br /><br />
That's why it's good to see at least one more country follow Canada's lead.  Chile, which is on the "priority watch list," has officially announced that it, too, <a href="http://www.emol.com/noticias/nacional/2013/05/01/596379/chile-no-reconoce-la-validez-de-la-lista-negra-de-pirateria-de-eeuu.html" target="_blank">does not recognize the legitimacy of the list</a> (translated):
<blockquote><i>
The Chilean government said today it does not recognize as a valid instrument rating called "301 list" that makes the United States on violation of intellectual property rights and this year again includes the country in its Priority Watch section .
<br /><br />
"This report is conducted outside the margins of the Free Trade Agreement between our country and the U.S., and therefore not recognized by Chile as a valid instrument rating," said a statement released this morning.
<br /><br />
The "'301 List' lacks clear criteria for categorizing the different countries, but is rather a reflection of the interests of American industry selectively applying their intellectual property standards to other countries," it added.
</i></blockquote>
Good for Chile to stand up for itself against the list.
<br /><br />
Of course, it's no surprise that Chile got put on the list.  As we noted last year, the country is actually a pioneer in <a href="http://www.techdirt.com/articles/20120911/06282620341/chile-leads-way-intermediary-liability-protections.shtml">strongly protecting intermediaries from liability</a>, thus much more strongly protecting internet free expression and innovation.  They're also actively <a href="http://www.techdirt.com/blog/innovation/articles/20120613/03265219299/why-is-us-so-hostile-to-foreign-entrepreneurs-who-want-to-build-businesses-here.shtml">encouraging innovation</a> by luring startups to Chile with all sorts of benefits.  Basically, Chile is quickly showing itself to be a supporter of innovation, which apparently isn't something the USTR wants to encourage.<br /><br /><a href="http://www.techdirt.com/articles/20130505/23161522956/chile-says-it-does-not-recognize-legitimacy-ustrs-special-301-report.shtml">Permalink</a> | <a href="http://www.techdirt.com/articles/20130505/23161522956/chile-says-it-does-not-recognize-legitimacy-ustrs-special-301-report.shtml#comments">Comments</a> | <a href="http://www.techdirt.com/articles/20130505/23161522956/chile-says-it-does-not-recognize-legitimacy-ustrs-special-301-report.shtml?op=sharethis">Email This Story</a><br />
 ]]></description>
<slash:department>good-for-them</slash:department>
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<pubDate>Mon, 6 May 2013 05:13:00 PDT</pubDate>
<title>Moral Panic Over Google Glass: White House Petition Asks To Ban Them To Prevent 'Indecent' Public Surveillance</title>
<dc:creator>Mike Masnick</dc:creator>
<link>http://www.techdirt.com/blog/innovation/articles/20130503/12261122940/moral-panic-over-google-glass-white-house-petition-asks-to-ban-them-to-prevent-indecent-public-surveillance.shtml</link>
<guid>http://www.techdirt.com/blog/innovation/articles/20130503/12261122940/moral-panic-over-google-glass-white-house-petition-asks-to-ban-them-to-prevent-indecent-public-surveillance.shtml</guid>
<description><![CDATA[ When cameras first came about there was a bit of a moral panic around them.  People feared being photographed at all and so there were various concerns raised, moral panics followed, and even an occasional proposed law about how cameras could be used.  It would appear that we may be approaching a similar moral panic around the coming launch of Google Glass.  There's been a growing buzz about <a href="http://techland.time.com/2013/05/02/the-real-privacy-implications-of-google-glass/" target="_blank">"privacy" concerns</a> around Google Glass -- one that has even led former Homeland Security boss Michael Chertoff to <a href="http://www.cnn.com/2013/05/01/opinion/chertoff-wearable-devices/index.html" target="_blank">worry about the implications</a>, and suggest Congress and the FTC take a look.  A publicity campaign called "Stop the Cyborgs" (seriously guys?) has sprung up offering <a href="http://stopthecyborgs.org/google-glass-ban-signs/" target="_blank">Google Glass Ban Signs</a> for places that want to ban the as-yet-unreleased technology.  And, most recently, someone put together a White House petition urging the White House to <a href="https://petitions.whitehouse.gov/petition/ban-google-glass-use-usa-until-clear-limitations-are-placed-prevent-indecent-public-surveillance/zMb9y0kh" target="_blank">ban the devices</a> until "limitations on public surveillance" can be put in place.  Not that the White House has that kind of authority, of course.
<br /><br />
The whole thing seems to be screaming moral panic around a new technology, which still might not even catch on.  Of course, even if Glass doesn't catch on, this is how technology works, and sooner or later, someone will get this kind of product right, such that eventually it won't even look odd like Glass, but will just fit into a contact lens or be directly embedded.  That's just how this stuff is likely to go.  People can freak out about it all they want and demand that there be a law, but most people recognize that the technology is coming one way or the other, and that's not going to change or go away.  The right thing to do is figure out how to deal with it, rather than looking for ways to stop it.  Though, just wait until someone at the MPAA wakes up and realizes that with Glass, someone will be able to record a movie...<br /><br /><a href="http://www.techdirt.com/blog/innovation/articles/20130503/12261122940/moral-panic-over-google-glass-white-house-petition-asks-to-ban-them-to-prevent-indecent-public-surveillance.shtml">Permalink</a> | <a href="http://www.techdirt.com/blog/innovation/articles/20130503/12261122940/moral-panic-over-google-glass-white-house-petition-asks-to-ban-them-to-prevent-indecent-public-surveillance.shtml#comments">Comments</a> | <a href="http://www.techdirt.com/blog/innovation/articles/20130503/12261122940/moral-panic-over-google-glass-white-house-petition-asks-to-ban-them-to-prevent-indecent-public-surveillance.shtml?op=sharethis">Email This Story</a><br />
 ]]></description>
<slash:department>takes-me-back</slash:department>
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<pubDate>Sat, 13 Apr 2013 09:00:00 PDT</pubDate>
<title>Awesome Stuff: Ferrofluid</title>
<dc:creator>Mike Masnick</dc:creator>
<link>http://www.techdirt.com/blog/innovation/articles/20130413/02124222699/awesome-stuff-ferrolicious.shtml</link>
<guid>http://www.techdirt.com/blog/innovation/articles/20130413/02124222699/awesome-stuff-ferrolicious.shtml</guid>
<description><![CDATA[ Last week you got to see four projects, so hopefully you banked that extra one, because this week we're going with just two.  However, they're both projects involving <a href="http://en.wikipedia.org/wiki/Ferrofluid" target="_blank">ferrofluid</a> that are perhaps competing with each other.  I could only find two live ferrofluid projects, and that made it easy to figure out what was on the list this week....
<ul>
<li>First up is the well-named <a href="http://www.kickstarter.com/projects/garehan/ferrocious-the-ferrofluid-sculpture-that-dances-to?ref=live" target="_blank">Ferrocious</a>, which not only shows you ferrofluid in action, but it also responds to music and dances around within the device.
<center>
<iframe width="480" height="360" src="http://www.kickstarter.com/projects/garehan/ferrocious-the-ferrofluid-sculpture-that-dances-to/widget/video.html" frameborder="0"> </iframe>
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I've gone back and forth on whether or not I really like this project.  The device is cool... but it seems a bit bulky, considering how small the space is where the ferrofluid is.  It has that mad scientist vibe, but at over $100, seems a bit steep.  They're also selling a simpler version that is just a more standard ferrofluid display with a magnet, rather than the whole "bounces to music" thing.   The project is ways past its rather low goal, but it also hasn't taken the Kickstarter community by wildfire yet either.
<center>
<iframe frameborder="0" height="380" src="http://www.kickstarter.com/projects/garehan/ferrocious-the-ferrofluid-sculpture-that-dances-to/widget/card.html" width="220"></iframe>
</center>
</li><li>The second one is also a ferrofluid display, but the <a href="http://www.kickstarter.com/projects/1323897061/neodrop-interactive-ferrofluid-display?ref=category" target="_blank">NeoDrop interactive display</a> definitely has a much more polished look to it, even though it (like the simplified Ferrocious device) relies on  hand held magnets to make the liquid do its thing.
<center>
<iframe width="480" height="360" src="http://www.kickstarter.com/projects/1323897061/neodrop-interactive-ferrofluid-display/widget/video.html" frameborder="0"> </iframe>
</center>
This device is also way overfunded based on a modest initial target.  It's worth noting that this device seems a lot cooler looking if you're going for that modernist aesthetic -- plus it's a <i>lot</i> cheaper than the Ferrocious device.  Either way, lots of people seem to be snapping up the devices to great fanfare.
<center>
<iframe frameborder="0" height="380" src="http://www.kickstarter.com/projects/1323897061/neodrop-interactive-ferrofluid-display/widget/card.html" width="220"></iframe>
</center>
</li></ul>
Anyway, that's it this week: short and sweet, and letting the ferrofluid do the talking... Until next time, enjoy thinking about ferrofluid.<br /><br /><a href="http://www.techdirt.com/blog/innovation/articles/20130413/02124222699/awesome-stuff-ferrolicious.shtml">Permalink</a> | <a href="http://www.techdirt.com/blog/innovation/articles/20130413/02124222699/awesome-stuff-ferrolicious.shtml#comments">Comments</a> | <a href="http://www.techdirt.com/blog/innovation/articles/20130413/02124222699/awesome-stuff-ferrolicious.shtml?op=sharethis">Email This Story</a><br />
 ]]></description>
<slash:department>make-it-dance</slash:department>
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<pubDate>Fri, 12 Apr 2013 19:39:00 PDT</pubDate>
<title>Documentary On The History Of Apple And Microsoft Show It Was All About Copying, Not Patents</title>
<dc:creator>Mike Masnick</dc:creator>
<link>http://www.techdirt.com/blog/innovation/articles/20130409/09212322633/documentary-history-apple-microsoft-show-it-was-all-about-copying-not-patents.shtml</link>
<guid>http://www.techdirt.com/blog/innovation/articles/20130409/09212322633/documentary-history-apple-microsoft-show-it-was-all-about-copying-not-patents.shtml</guid>
<description><![CDATA[ We recently posted about an absolutely ridiculous NY Times op-ed piece in which Pat Choate argued both that patent laws have been getting weaker, and that if we had today's patent laws in the 1970s that <a href="http://www.techdirt.com/articles/20130401/01463022521/author-claims-that-if-apple-microsoft-started-today-theyd-fail-without-stronger-patent-protection.shtml">Apple and Microsoft</a> wouldn't have survived since bigger companies would just copy what they were doing and put them out of business.  We noted that this was completely laughable to anyone who knew the actual history.  A day or so ago, someone (and forgive me, because I can no longer find the tweet) pointed me on Twitter to a <a href="http://www.youtube.com/watch?v=m8YL6aufrd0" target="_blank">45 minute excerpt from a documentary about the early days of Microsoft and Apple</a> and it's worth watching just to show how laughably wrong Choate obviously is.
<center>
<iframe width="420" height="315" src="http://www.youtube.com/embed/m8YL6aufrd0" frameborder="0" allowfullscreen></iframe>
</center>
There are two key themes that stand out incredibly strongly in this:  both Microsoft and Apple did an awful lot of what they did by shamelessly copying the work of others, and the big companies floating around the space (mainly IBM and Xerox) clearly had no clue at all about what was going on.  The few times they discovered interesting things, they didn't know what to do with them, and let Microsoft and Apple walk all over them to build something better that people wanted.  And when they tried to jump into these markets by copying the work of Apple and Microsoft, they tended to do a really bad job of it.  On the copying front, while most people are familiar with Apple copying the GUI from Xerox, less well known is the story of Tim Patterson at Seattle Computer Products reverse engineering CP/M based on understanding CP/M's APIs to create the early versions of DOS that Microsoft licensed to IBM.
<br /><br />
Also noteworthy: no discussion of patents at all.  At the very end of the clip there's a bit of a discussion from former Apple CEO John Sculley concerning Apple's legal fight with Microsoft over the look and feel of the GUI.  He mentions there was nothing patentable, but that they felt it was a copyright violation.  However, he also notes that Apple's strong belief that they could stop Microsoft via copyright also led to complacency within Apple, and less focus on competing by innovation.
<br /><br />
In other words, the claims Choate makes are laughable.  There was little to no reliance on patents during the early days, and a very strong culture of copying anything and everything, while competing by trying to out-innovate each other.  Furthermore, big companies couldn't figure out what was going on, even if they wanted to copy these successful upstarts.  At one point, Larry Ellison jokes about how IBM stupidly ceded the chip market to Intel and the OS/application market to Microsoft when it could have owned it all.
<br /><br />
One point about the video.  The YouTube link says this is from the "documentary" <a href="http://en.wikipedia.org/wiki/Pirates_of_Silicon_Valley" target="_blank"><i>Pirates of Silicon Valley</i></a>.  That's incorrect.  If I remember correctly, <i>Pirates of Silicon Valley</i> was actually a "TV movie" based on the same subject material, with Noah Wylie playing Steve Jobs and Anthony Michael Hall playing Bill Gates.  Instead, I'm pretty sure that the clips are actually from the documentary <a href="http://en.wikipedia.org/wiki/Triumph_of_the_Nerds" target="_blank"><i>Triumph of the Nerds</i></a>, put together and narrated by Mark Stephens, who is better known as Robert X. Cringely (there's another interesting historical story about the legal fight over the <a href="http://en.wikipedia.org/wiki/Robert_X._Cringely" target="_blank">Cringely name</a>, but that's a totally different tangent).  This documentary actually came out in 1996, so it's interesting to see how it mostly predates the internet (though there is some discussion of the internet), Jobs' return to Apple and a variety of other things that happened over the past 15 years.  Either way, it should put to rest Choate's silly claims.<br /><br /><a href="http://www.techdirt.com/blog/innovation/articles/20130409/09212322633/documentary-history-apple-microsoft-show-it-was-all-about-copying-not-patents.shtml">Permalink</a> | <a href="http://www.techdirt.com/blog/innovation/articles/20130409/09212322633/documentary-history-apple-microsoft-show-it-was-all-about-copying-not-patents.shtml#comments">Comments</a> | <a href="http://www.techdirt.com/blog/innovation/articles/20130409/09212322633/documentary-history-apple-microsoft-show-it-was-all-about-copying-not-patents.shtml?op=sharethis">Email This Story</a><br />
 ]]></description>
<slash:department>just-a-reminder</slash:department>
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<pubDate>Fri, 12 Apr 2013 18:39:48 PDT</pubDate>
<title>Here's Another Inventor Who Willingly Gave Away His Greatest Idea In Order To Establish It As A Global Standard</title>
<dc:creator>Glyn Moody</dc:creator>
<link>http://www.techdirt.com/blog/innovation/articles/20130412/09091522689/heres-another-inventor-who-willingly-gave-his-greatest-idea-away-order-to-establish-it-as-global-standard.shtml</link>
<guid>http://www.techdirt.com/blog/innovation/articles/20130412/09091522689/heres-another-inventor-who-willingly-gave-his-greatest-idea-away-order-to-establish-it-as-global-standard.shtml</guid>
<description><![CDATA[ <p>
Beyond the fact that you are using it to read these words, the Web has undeniably had a major impact on a large part of the world's population.  It's certainly one of the greatest inventions of recent times, and as Techdirt has noted before, one of the reasons it has taken off in such an amazing way, and led to so many further innovations, is because Sir Tim Berners-Lee decided not to <a href="https://www.techdirt.com/articles/20110811/10245715476/what-if-tim-berners-lee-had-patented-web.shtml">patent</a> it.
</p>
<p>
Few would argue that the <ahref ="https://en.wikipedia.org/wiki/MIDI">Musical Instrument Digital Interface -- MIDI -- is quite in the same league as the World Wide Web, and yet for musicians it has been hugely important in providing a common standard for playing and composing digital music.  As an article in Fortune reminds us, one reason for that success is that like Berners-Lee, <a href="http://tech.fortune.cnn.com/2013/04/11/one-of-techs-most-successful-inventors-never-made-a-cent/">MIDI's inventor, Dave Smith, also gave away his brilliant creation</a>:

<i><blockquote>when Smith collaborated with a handful of Japanese companies -- including Roland and Yamaha -- to bring MIDI into the world 30 years ago, he skipped the licensing fees, instead offering up his idea for the world to steal. "We wanted to be sure we had 100% participation, so we decided not to charge any other companies that wanted to use it," says Smith.</blockquote></i>

What's noteworthy here -- aside from the ridiculous use of the word "steal" -- is that letting people use the MIDI standard for free was not some accident or oversight: well before the example of Berners-Lee, Smith understood that it was the best way to get his standard widely adopted.  That's not to say that he hasn't occasionally hankered after the riches he might have received had he charged for a license, but in the end he  recognizes the "obvious" rightness of the move:

<i><blockquote>Smith at times questions his decision to forgo licensing fees for MIDI, but ultimately comes back to the same conclusion. "It seemed like an obvious thing to do at the time," he says, "and in hindsight, I think it was the right thing to do." In the world of technology, that makes Smith a different kind of legendary.</blockquote></i>

Indeed: thanks to that far-sighted decision 30 years ago, he joins Berners-Lee as one of the true benefactors of humanity.  Let's hope that in the coming years there are many more with vision enough to join them.
</ahref>
</p>
<p>
Follow me @glynmoody on <a href="http://twitter.com/glynmoody">Twitter</a> or <a href="http://identi.ca/glynmoody">identi.ca</a>, and on <a href="https://plus.google.com/100647702320088380533">Google+</a>
</p><br /><br /><a href="http://www.techdirt.com/blog/innovation/articles/20130412/09091522689/heres-another-inventor-who-willingly-gave-his-greatest-idea-away-order-to-establish-it-as-global-standard.shtml">Permalink</a> | <a href="http://www.techdirt.com/blog/innovation/articles/20130412/09091522689/heres-another-inventor-who-willingly-gave-his-greatest-idea-away-order-to-establish-it-as-global-standard.shtml#comments">Comments</a> | <a href="http://www.techdirt.com/blog/innovation/articles/20130412/09091522689/heres-another-inventor-who-willingly-gave-his-greatest-idea-away-order-to-establish-it-as-global-standard.shtml?op=sharethis">Email This Story</a><br />
 ]]></description>
<slash:department>true-generosity</slash:department>
<wfw:commentRss>http://www.techdirt.com/comment_rss.php?sid=20130412/09091522689</wfw:commentRss>
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<pubDate>Fri, 12 Apr 2013 07:43:18 PDT</pubDate>
<title>New Book On The History Of Music, Copyright And Piracy Shows How Copyright Tends To Hold Back Music</title>
<dc:creator>Mike Masnick</dc:creator>
<link>http://www.techdirt.com/articles/20130410/07134322658/new-book-history-music-copyright-piracy-shows-how-copyright-tends-to-hold-back-music.shtml</link>
<guid>http://www.techdirt.com/articles/20130410/07134322658/new-book-history-music-copyright-piracy-shows-how-copyright-tends-to-hold-back-music.shtml</guid>
<description><![CDATA[ Reason is running a <a href="http://reason.com/archives/2013/04/09/the-long-fruitful-history-of-music-pirac" target="_blank">very interesting review</a> of a new book by Alex Sayf Cummings, called <a href="http://www.amazon.com/gp/product/0199858225/ref=as_li_ss_tl?ie=UTF8&#038;camp=1789&#038;creative=390957&#038;creativeASIN=0199858225&#038;linkCode=as2&#038;tag=techdirtcom-20"><i>Democracy of Sound: Music Piracy and the Remaking of American Copyright in the Twentieth Century</i></a>.  It reiterates many of the points that we've made before about music and copyright, but with a strong historical basis, highlighting how these issues are not new.  In fact, it reiterates how Congress was quite concerned that putting copyright on recordings was a very dangerous mistake:
<blockquote><i>
The fact that music is widely seen as "intellectual property" is itself a product of that struggle. For a long time, the U.S. worked to separate intellect and property. In the early 1900s when copyright issues around sound recording were first being negotiated, the law "protected the tangible expression of an idea and not the idea itself," Cummings writes. Lawmakers struggled to figure out where sound recordings fit into that framework. Was the recording a tangible expression of a new idea? Or was it simply a copy of an idea? Congress initially leaned towards the second interpretation&#8212;and, as a result, sound recordings could not be copyrighted. For decades, pirates had to be prosecuted under common law or statutory bans on unfair competition. It was only in the 1970s that copyright was extended to sound recordings.
</i></blockquote>
As the book notes, lawmakers were quite worried that extending copyright to sound recordings would stifle creativity -- and, as the book shows, their fears were not out of line:
<blockquote><i>
Unrestricted property rights in music, they feared, could create monopolies, harm consumers, and throttle innovation and competition This was the rationale, in part, for giving songwriters only limited rights over the use of their songs.  Under the law, licensing was compulsory: Songwriters received a fee from recordings, but could not refuse the use of their work. You can thank this system for America's long history of cover versions. Indeed, in the years before it was common to play records on the radio, these remakes were central to the record labels' business model: Re-recordings of hit songs by different artists were a major source of income. <b>A whole subset of artistic production and commerce, in other words, was enabled not by the expansion but by the limitation of intellectual property rights.</b>
<br /><br />
This apparent contradiction surfaces again and again throughout Cummings' book. <b>Property rights in music are supposed to promote creativity, but often they seem to either be irrelevant, or else actively retard it.</b>
</i></blockquote>
You can read the full review over at Reason, but the full book sounds like a must read in the collection of books that highlight how damaging copyright has been to creativity over the years.<br /><br /><a href="http://www.techdirt.com/articles/20130410/07134322658/new-book-history-music-copyright-piracy-shows-how-copyright-tends-to-hold-back-music.shtml">Permalink</a> | <a href="http://www.techdirt.com/articles/20130410/07134322658/new-book-history-music-copyright-piracy-shows-how-copyright-tends-to-hold-back-music.shtml#comments">Comments</a> | <a href="http://www.techdirt.com/articles/20130410/07134322658/new-book-history-music-copyright-piracy-shows-how-copyright-tends-to-hold-back-music.shtml?op=sharethis">Email This Story</a><br />
 ]]></description>
<slash:department>but-of-course</slash:department>
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<pubDate>Tue, 9 Apr 2013 08:24:50 PDT</pubDate>
<title>New Study: USPTO Drastically Lowered Its Standards In Approving Patents To Reduce Backlog</title>
<dc:creator>Mike Masnick</dc:creator>
<link>http://www.techdirt.com/blog/innovation/articles/20130408/08244222623/new-study-uspto-drastically-lowered-its-standards-approving-patents-to-reduce-backlog.shtml</link>
<guid>http://www.techdirt.com/blog/innovation/articles/20130408/08244222623/new-study-uspto-drastically-lowered-its-standards-approving-patents-to-reduce-backlog.shtml</guid>
<description><![CDATA[ The massive problems of the patent system really started getting renewed attention between 2002 and 2004 or so, highlighted by the publication of the book <a href="http://www.amazon.com/gp/product/0691127948/ref=as_li_ss_tl?ie=UTF8&#038;camp=1789&#038;creative=390957&#038;creativeASIN=0691127948&#038;linkCode=as2&#038;tag=techdirtcom-20"><i>Innovation and Its Discontents: How Our Broken Patent System Is Endangering Innovation and Progress, and What to Do About It</i></a> by Adam Jaffe and Josh Lerner.  By that point, the combination of two key events in the late 90s was clearly being felt on the patents system.  First, and most importantly, was the impact of the <a href="http://en.wikipedia.org/wiki/State_Street_Bank_v._Signature_Financial_Group">State Street decision</a> that announced to the world that the courts considered software and business method patents legal.  Also important was the 1999 publication of <a href="http://www.amazon.com/gp/product/0875848990/ref=as_li_ss_tl?ie=UTF8&#038;camp=1789&#038;creative=390957&#038;creativeASIN=0875848990&#038;linkCode=as2&#038;tag=techdirtcom-20"><i>Rembrandts in the Attic: Unlocking the Hidden Value of Patents</i></a> by Kevin Rivette and David Kline, which led patent lawyers and tech companies alike to suddenly both ramp up their patenting, but also to look to sell off "unused" patents to companies (lawyers) who did nothing but threaten and sue over them.  Suddenly, patent trolls became a big, big issue.
<br /><br />
Around the time of the Jaffe and Lerner book, the USPTO seemed to actually take much of the criticism to heart.  One big part of Jaffe and Lerner's criticism was the simple fact that patent examiners had significant incentives to approve patents, and almost none to reject patents.  That is, the metrics by which they were measured included the rate of how many patent applications they processed.  But, since there is no such thing as a truly final rejection of a patent, people would just keep asking the USPTO to look at their application again.  Each time an examiner had to do this, their "rate" would decline, since they'd be spending even more time on the same old patent application.  But <i>approving</i> a patent got it off your plate and let the court system sort out any mess.  However, after the book was published, the USPTO actually seemed to pay attention and changed its internal incentives a bit to push for high quality approvals.  Not surprisingly, this meant that the approval rate dropped.  But, since there was more demand for bogus patents to sue over, more people appealed the rejections and the backlog grew.
<br /><br />
Patent system lovers started whining about the "backlog," but what they were really pissed off about was the fact that their bogus patents weren't getting approved.  Unfortunately, their message resonated with the new regime of the Obama administration, mainly Commerce Dept. boss, Gary Locke, and head of the USPTO, David Kappos.  Back in 2010, we noted that the USPTO had shifted back to <a href="http://www.techdirt.com/articles/20100819/12015210689.shtml">approving "pretty much anything"</a> and had clearly decreased their quality standards in an effort to rush through the backlog.  Not surprisingly, in stating this, we were attacked mercilessly by patent system supporters, who insisted that we were crazy, and the truth was that David Kappos had found some magic elixir that made all USPTO agents super efficient (or something like that -- their actual explanations were not much more coherent).  No matter what, they insisted that it was entirely possible to massively ramp up the number of approvals, decrease the backlog and not decrease patent quality.
<br /><br />
Needless to say, we've been skeptical that this was possible.
<br /><br />
And now the data is in, suggesting we were absolutely right all along.  A new study done by Chris Cotropia and Cecil Quillen of the University of Richmond and independent researcher Ogden Webster used information obtained via FOIA requests to delve into <a href="http://arstechnica.com/tech-policy/2013/04/study-suggests-patent-office-lowered-standards-to-cope-with-backlog/" target="_blank">what was really going on in the patent office</a> (link to a great summary of the research by Tim Lee).  The key issue, is (once again) the fact that patents are never truly rejected in full, and the people applying for patents just keep on trying again and again until someone in the USPTO approves it.  However, the USPTO, to hide some of this, counts some of those "rejections" that eventually get approved as "rejections" to artificially deflate the actual "approval rate" of patent applications.
<br /><br />
When the researchers corrected for all of this, they found that the actual patent approval rate in 2012 was almost 90% of all patents eventually get approved.  <i>90%</i>!  That's about where it was in 2004 and 2005 (as discussed above), though in 2001 it actually came close to <i>100%</i>!  However, as noted above, by the second half of 00's corrections had been put in place and the approval rate had declined to under 70% in 2009 -- meaning that the USPTO was actually rejecting bad patents.  But over the past three years, we've shot right back up.  And it's clear that if the approval rate is much higher, the USPTO is approving many, many more bad patents.
<br /><br />
In fact, it's likely that the story is even worse than before.  Back in 2004 and 2005 when the approval rates were similar, it was really before the public was aware of just how bad the patent troll problem was, so you had many fewer people trying to get their own bad patents to troll over.  In the past five years or so that has changed quite a bit.  So the number of <i>applications</i> has <a href="http://www.uspto.gov/web/offices/ac/ido/oeip/taf/us_stat.htm" target="_blank">shot up</a> massively as well.  In 2004 there were 382,139 applications.  By 2011 that had shot up by 50% to 576,763.
<br /><br />
I don't think anyone thinks that we suddenly became 50% more inventive between 2004 and 2011.  No, the truth is that people were suddenly flooding the USPTO with highly questionable patent applications on broad and vague concepts, hoping to get a lottery ticket to shake down actual innovators.  And, the USPTO under David Kappos complied, granting nearly all of them.  Incredible.
<br /><br />
When Thomas Jefferson put together the first patent system -- after being quite skeptical that patents could actually be a good thing -- he was quite careful to note that patents should only be granted in the rarest of circumstances, since such a monopoly could do a lot more harm than good.  And yet, today, we encourage tons of people to send in any old bogus idea, and the USPTO has turned into little more than a rubber stamp of approval, allowing patent holders to shake down tons of people and companies, knowing that many will pay up rather than fight, and then leaving the few cases where someone fights back to be handled by the courts (who seem ignorant of the game being played).
<br /><br />
The end result is a true disaster for actual innovation and the economy.  We should all be able to agree that bad patents are not a good thing.  And the USPTO is, undoubtedly, approving tons of awful patents when its true approval rate is hovering around 90%.<br /><br /><a href="http://www.techdirt.com/blog/innovation/articles/20130408/08244222623/new-study-uspto-drastically-lowered-its-standards-approving-patents-to-reduce-backlog.shtml">Permalink</a> | <a href="http://www.techdirt.com/blog/innovation/articles/20130408/08244222623/new-study-uspto-drastically-lowered-its-standards-approving-patents-to-reduce-backlog.shtml#comments">Comments</a> | <a href="http://www.techdirt.com/blog/innovation/articles/20130408/08244222623/new-study-uspto-drastically-lowered-its-standards-approving-patents-to-reduce-backlog.shtml?op=sharethis">Email This Story</a><br />
 ]]></description>
<slash:department>shockingly-under-shocking</slash:department>
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<pubDate>Wed, 3 Apr 2013 10:00:31 PDT</pubDate>
<title>Author Claims That If Apple And Microsoft Started Today They'd Fail Without Stronger Patent Protection</title>
<dc:creator>Mike Masnick</dc:creator>
<link>http://www.techdirt.com/articles/20130401/01463022521/author-claims-that-if-apple-microsoft-started-today-theyd-fail-without-stronger-patent-protection.shtml</link>
<guid>http://www.techdirt.com/articles/20130401/01463022521/author-claims-that-if-apple-microsoft-started-today-theyd-fail-without-stronger-patent-protection.shtml</guid>
<description><![CDATA[ The NY Times has a slightly odd op-ed piece, written by Eamonn Fingleton, author of a book about how China is going to dominate the US economically.  That may absolutely be true, but this oped tries to bend over backwards to prove that China will be more innovative than the US... and <a href="http://www.nytimes.com/2013/03/31/sunday-review/america-the-innovative.html?pagewanted=all" target="_blank">uses patents as a proxy</a>:
<blockquote><i>
Meanwhile the evidence of international patent filings is looking increasingly ominous. According to data compiled by the World Intellectual Property Organization, the world&#8217;s single most prolific filer of international patents as of 2011 was ZTE, a Chinese telecommunications corporation. Its filings were up an astounding fivefold from 2009. Another Chinese corporation, Huawei, moved up to third in the 2011 league table. The only United States corporation to make the Top 10 was Qualcomm. 
</i></blockquote>
First of all, the number of patents filed is meaningless.  You can file a ton of patents and it means absolutely nothing concerning innovation.  First off, applications are different from granted patents.  Second, and more importantly, patents show <a href="http://www.techdirt.com/articles/20070108/162044.shtml">no relation to innovation</a>.  Third, when it comes to Chinese patents, the Chinese realized long ago that patents are merely a tool for protectionist tariff-like policies that can be enacted with less scrutiny or trade war issues and have <a href="http://www.techdirt.com/articles/20110102/15230512491/chinas-patent-strategy-isnt-about-innovation-its-economic-weapon-against-foreign-companies.shtml">acted accordingly</a>.  Basically, nothing in the paragraph above actually supports Fingleton's argument.
<br /><br />
But, then it gets much, much worse.  He claims that the US somehow has a weaker patent system today than in the past (it doesn't) and then quotes another author claiming that Apple and Microsoft relied on strong patents to survive when they started out:
<blockquote><i>
 All this is the more troubling because United States patent law has now been drastically weakened. Congress has made it much harder for small American inventors to protect their intellectual property from infringement and theft.
<br /><br />
Pat Choate, the author of &#8220;Hot Property,&#8221; a book on the theft of intellectual property, maintains that if the new patent regimen had existed when corporations like Apple and Microsoft first got going, they might never have made it out of the little leagues. Their patents would have been quickly infringed by predatory larger corporations, and rather than engage in unequal litigation battles against deep-pocketed and ruthless opponents, they could have felt forced to share their technology on concessionary terms.
</i></blockquote>
Almost nothing in what's said above has any resemblance in the truth.  The patent system hasn't been "drastically weakened" at all.  Congress made some slight modifications to the patent system, which do nothing to make it harder for "small inventors to protect their intellectual property from infringement and theft."
<br /><br />
As for the claims made by Pat Choate, I'm just left shaking my head.  First of all, both of Apple and Microsoft's key success stories came from <i>copying the works of other, larger companies</i> when those companies failed to recognize what they had on their hands, and more or less <i>let</i> the upstarts take those ideas and run with them.  Also, in both cases, other, larger companies did come in and try to copy them, and weren't that successful.  Also, more importantly, neither company aggressively relied on patents to protect its works.  Bill Gates famousely said the following about patents:
<blockquote><i>
If people had understood how patents would be granted when most of today's ideas were invented, and had taken out patents, the industry would be at a complete standstill today. I feel certain that some large company will patent some obvious thing related to interface, object orientation, algorithm, application extension or other crucial technique. If we assume this company has no need of any of our patents then the have a 17-year right to take as much of our profits as they want.
</i></blockquote>
Not exactly an example of Microsoft using patents to protect itself, but rather quite the opposite.  Apple, in the meantime, relied heavily on ideas from Xerox and SRI in making its early computers -- some of which it licensed, and some of which it did not.  However, much of the work was not heavily patented and while Apple received some early patents, it did little to enforce those patents to stop copycats (its most famous lawsuit, against Microsoft for copying the Windows interface, focused on copyright... and it failed, anyway).
<br /><br />
You could easily argue that if Microsoft and Apple were started today they would absolutely be harmed by today's patent system, but not in the way that Choate or Fingleton suggest.  Rather, they would be sued by trolls over and over and over again, meaning they'd be wasting money fighting lawsuits, and possibly wouldn't be able to survive that.  What they needed to survive was an era in which patent enforcement was <b>not</b> common and especially one where patents were considered inapplicable to software.
<br /><br />
Microsoft and Apple became massive success stories in part because of the <i>weakness</i> of the patent system in their era, because patents don't help innovation, they put a tollbooth on it.  This article certainly puts a huge question mark over the quality of both Choate and Fingleton's work, as it shows little actual knowledge of the subject they're discussing.<br /><br /><a href="http://www.techdirt.com/articles/20130401/01463022521/author-claims-that-if-apple-microsoft-started-today-theyd-fail-without-stronger-patent-protection.shtml">Permalink</a> | <a href="http://www.techdirt.com/articles/20130401/01463022521/author-claims-that-if-apple-microsoft-started-today-theyd-fail-without-stronger-patent-protection.shtml#comments">Comments</a> | <a href="http://www.techdirt.com/articles/20130401/01463022521/author-claims-that-if-apple-microsoft-started-today-theyd-fail-without-stronger-patent-protection.shtml?op=sharethis">Email This Story</a><br />
 ]]></description>
<slash:department>wtf</slash:department>
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<pubDate>Fri, 29 Mar 2013 19:39:00 PDT</pubDate>
<title>This Is Not The Cloud Computing We Should Have</title>
<dc:creator>Mike Masnick</dc:creator>
<link>http://www.techdirt.com/blog/innovation/articles/20130321/01021322403/this-is-not-cloud-computing-we-should-have.shtml</link>
<guid>http://www.techdirt.com/blog/innovation/articles/20130321/01021322403/this-is-not-cloud-computing-we-should-have.shtml</guid>
<description><![CDATA[ Even though I was never a big Google Reader user, its <a href="http://www.techdirt.com/articles/20130313/17262322315/killing-google-reader-highlights-risk-relying-single-provider.shtml">death</a> has got me thinking about online services quite a bit lately -- and really reminded me that <b>we've done the cloud wrong</b>.  Rather than build true cloud computing, we've built a bunch of lockboxes.
<br /><br />
<b>The cloud was supposed to free us, not lock us in</b>
<br /><br />
"Cloud computing" went by a variety of other terms in the past before this marketing term stuck, but the key part of it was that it was supposed to free us of worrying about the location of our data.  Rather than having to have things stored locally, the data could be anywhere, and we could access it via any machine or device.  That <i>sort of</i> happened, and there definitely are benefits to data being stored in the cloud, rather than locally.  But... what came with today's "cloud" was a totally different kind of lock: a lock to the service.
<br /><br />
<b>I can point many apps to data stored locally</b>
<br /><br />
I wrote something related to this a few years ago, concerning <a href="http://www.techdirt.com/articles/20110606/13200014569/were-missing-point-cloud-its-not-supposed-to-be-locked-to-single-service.shtml">music in the cloud</a>.  If I have a bunch of MP3s stored locally, I can point any number of music apps at my music folder, and they can all play that music.  As long as the data is not in a proprietary format, I can find the app that works best for me and the data is separate from the app.  Even when you have proprietary formats like Microsoft's .doc, other apps can often make use of them as well -- so, for example, I can get by with Libre Office, and I don't lose access to all of my old Microsoft Word docs.
<br /><br />
This is really useful, because it helps us avoid vendor lock-in in many cases.  Even when, say, Microsoft or Apple dominates the market.  It's still possible to come in and be compatible.  The competition then focuses on building better services, rather than reinventing the data model.  That's much more useful to consumers, because the innovation is focused on making their lives better, rather than reinventing the wheel.
<br /><br />
<b>Today's cloud brings us back to walled gardens</b>
<br /><br />
For the most part, today, however, "cloud" applications bundle the storage and the service as one, and the two are linked inseparably.  You check your data into a new cloud service, but the application layer and the data are both held by the same company.  Yes, you can often <i>transfer</i> data from one service to the other -- such as Google's "data liberation front" effort, which is fantastic (and goes beyond many other companies' efforts), but just the fact that data needs to be liberated suggests we're taking the wrong approach altogether.  Rather than having to "export" all of your feeds from Google Reader and then waiting patiently for 50,000 other people who are trying to upload them to the few small Reader competitors out there, why shouldn't we have each had an OPML file stored somewhere that <i>we control</i>, and that we could easily point <i>any</i> reader application, whether its local or "in the cloud."  And, yes, there are some services that attempt to do this, but it's not where the whole "cloud" space has gone.
<br /><br />
<b>Separate and liberate the data from the infrastructure</b>
<br /><br />
What the cloud should be about is both freeing us from being locked to local data, and <i>also</i> freeing us from having that data locked to a particular service.  I should be able to keep my data in one spot and then access it via a variety of cloud clients -- and the clients and the data shouldn't necessarily be directly connected or held by the same party.  If I don't want to listen to my music via one app, I can just connect a different app to my personal data cloud and off we go.  If Google Reader shuts down, no problem, just point a different app at my RSS data.  No extraction, no uploading.  Just go.
<br /><br />
There are, of course, plenty of players around which sort of do this.  DropBox, Box, Amazon's S3 and even Google Drive are setting themselves up as personal data clouds, and there are a growing number of apps that run across them.  Projects like <a href="http://lockerproject.org/" target="_blank">the Locker Project</a> are thinking about how we store personal data separated from apps as well.  And I know there are a bunch of other projects either around today or quickly approaching release, that also seek to do something in this space.
<br /><br />
But, for the most part, all of the stories that people talk about concerning "cloud" computing almost always involve services that tie together the app and the data and all you're really doing is trading the former limitations of local data for the limitations of a single service provider controlling your data.  Many service providers <i>want</i> this, of course.  It's a form of lock-in.  Plus, having some sort of access to your data and your usage can enable them to do other things, such as more accurately data mine you and your usage.
<br /><br />
But, as users, we really should be pushing more towards embracing the apps that separate the app from the data and that let you point their "cloud" app at any particular place you store your "cloud" data.  Some of this may involve standardizing certain data formats, but that makes sense anyway, as, once again, that's an area where there are tremendous benefits to <b>not</b> reinventing the wheel, so that the innovation and competition can focus on the service level.  While some vendors may fear losing lock-in, if they truly believe in their own ability to provide great services, it shouldn't be a problem.  At the same time, they should also realize that embracing this kind of world means that it's easier for others to jump in and test <i>their</i> services as well.
<br /><br />
The death of Google Reader raised a lot of issues around trust, and while you could "export" the data, that process is still messy and archaic when you think about it.  The future of cloud computing should be much more focused on separating the data from the service.  That would remove the fear that many are now talking about concerning adopting new cloud services that might not last very long.  If the data is stored elsewhere, and entirely in the control of the user, then you don't need to trust the service provider nearly as much, but can dip in and test out different apps operating on the same data, and switch with ease.
<br /><br />
If we're going to see the real promise of "the cloud" take place, that's where things need to head.  We should be increasingly skeptical of "cloud" apps that also control the data.<br /><br /><a href="http://www.techdirt.com/blog/innovation/articles/20130321/01021322403/this-is-not-cloud-computing-we-should-have.shtml">Permalink</a> | <a href="http://www.techdirt.com/blog/innovation/articles/20130321/01021322403/this-is-not-cloud-computing-we-should-have.shtml#comments">Comments</a> | <a href="http://www.techdirt.com/blog/innovation/articles/20130321/01021322403/this-is-not-cloud-computing-we-should-have.shtml?op=sharethis">Email This Story</a><br />
 ]]></description>
<slash:department>we've-got-it-all-wrong</slash:department>
<wfw:commentRss>http://www.techdirt.com/comment_rss.php?sid=20130321/01021322403</wfw:commentRss>
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<pubDate>Fri, 29 Mar 2013 09:55:24 PDT</pubDate>
<title>Wal-Mart Wants Store Customers To Deliver Packages To Online Shoppers</title>
<dc:creator>Mike Masnick</dc:creator>
<link>http://www.techdirt.com/blog/innovation/articles/20130328/16172422503/wal-mart-wants-store-customers-to-deliver-packages-to-online-shoppers.shtml</link>
<guid>http://www.techdirt.com/blog/innovation/articles/20130328/16172422503/wal-mart-wants-store-customers-to-deliver-packages-to-online-shoppers.shtml</guid>
<description><![CDATA[ Having just seen cases where legacy players have felt <a href="http://www.techdirt.com/blog/innovation/articles/20130327/02594322476/taxi-limo-trade-group-hates-innovative-upstarts-labels-them-rogue-applications.shtml">threatened</a> by more innovative startups that take advantage of more distributed "peer-production" rather than top-down centralized systems of old, it's interesting to see a counter example.  Apparently, Wal-Mart is considering a plan in which it tries to get <a href="http://www.reuters.com/article/2013/03/28/us-retail-walmart-delivery-idUSBRE92R03820130328" target="_blank">in-store shoppers to help deliver packages to online buyers</a>.
<blockquote><i>
"I see a path to where this is crowd-sourced," Joel Anderson, chief executive of Walmart.com in the United States, said in a recent interview with Reuters.
<br /><br />
Wal-Mart has millions of customers visiting its stores each week. Some of these shoppers could tell the retailer where they live and sign up to drop off packages for online customers who live on their route back home, Anderson explained.
<br /><br />
Wal-Mart would offer a discount on the customers' shopping bill, effectively covering the cost of their gas in return for the delivery of packages, he added.
</i></blockquote>
The company admits that it's just brainstorming the idea at this point, but it's always interesting to see big established companies recognizing that others have been disrupting parts of their core business, and rather than freak out about it, try to take the disruption even further.  Of course, this might serve to disrupt <i>other</i> legacy providers, <a href="http://www.project-disco.org/competition/032813-walmart-goes-startup-retail-giant-plans-to-experiment-with-crowd-sourcing/" target="_blank">such as UPS and FedEx</a>.  Hopefully they won't freak out about it, but who wouldn't be surprised to start seeing stories raising moral panics about how "dangerous" this new plan will be since the drivers won't be wearing uniforms any more?<br /><br /><a href="http://www.techdirt.com/blog/innovation/articles/20130328/16172422503/wal-mart-wants-store-customers-to-deliver-packages-to-online-shoppers.shtml">Permalink</a> | <a href="http://www.techdirt.com/blog/innovation/articles/20130328/16172422503/wal-mart-wants-store-customers-to-deliver-packages-to-online-shoppers.shtml#comments">Comments</a> | <a href="http://www.techdirt.com/blog/innovation/articles/20130328/16172422503/wal-mart-wants-store-customers-to-deliver-packages-to-online-shoppers.shtml?op=sharethis">Email This Story</a><br />
 ]]></description>
<slash:department>leveraging-the-customer-base</slash:department>
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<pubDate>Thu, 28 Mar 2013 13:03:00 PDT</pubDate>
<title>Taxi, Limo Trade Group Hates Innovative Upstarts, Labels Them 'Rogue Applications'</title>
<dc:creator>Mike Masnick</dc:creator>
<link>http://www.techdirt.com/blog/innovation/articles/20130327/02594322476/taxi-limo-trade-group-hates-innovative-upstarts-labels-them-rogue-applications.shtml</link>
<guid>http://www.techdirt.com/blog/innovation/articles/20130327/02594322476/taxi-limo-trade-group-hates-innovative-upstarts-labels-them-rogue-applications.shtml</guid>
<description><![CDATA[ There's nothing like a bit of disruptive innovation to make the legacy players start busting out the old moral panics.  We've written a few times about the new generation of ride-for-hire and ride-share services, which are really disrupting the old taxi and limo business -- leading to all sorts of highly questionable lawsuits and attempts at regulating these new players into oblivion.  In almost every case, it seems quite clear that these attacks are not because the service is bad for consumers... but because it's disrupting traditional players who haven't innovated.  So, it came as little surprise this week to receive an email from the "Taxi, Limousine &#038; Paratransit Association" excitedly telling me all about a new paper they've issued with a giant "warning" about what they call "rogue apps."  Isn't that great?  Rather than innovative and disruptive services that consumers absolutely love, they just rebrand them as "rogue" apps and they can make them seem sssssssssssssscary.  The paper grades various new services, giving them a "red light," "yellow light" or "green light."
<br /><br />
Not surprisingly, the more well known apps -- Uber, SideCar, Lyft and Tickengo -- all have received the coveted "red light."  While according to the TLPA this means they're dangerous "rogue apps," to me it suggests that they're all doing something right.  They're providing services that people want that are more convenient or better priced than the old guard, which is why the old guard has to attack them.
<br /><br />
The key point they make is that these are all "unregulated" taxi services, which allows them to go into full out moral panic mode about how, without regulations, these services will likely take advantage of consumers.  The paper talks about threats of "criminal" drivers and the potential for meter rigging.  Of course, as we've seen in other industries, this seems like a clear case of businesses using regulations to <a href="http://www.techdirt.com/articles/20120627/00031719500/why-you-cant-braid-someones-hair-utah-money-without-first-paying-16k.shtml">keep out innovation and competitors</a>, rather than for a legitimate purpose.  Yes, many of those regulations were put in place for a good reason originally, yet many of those reasons really don't apply to these new services.
<br /><br />
In the past, you needed regulations to protect you from drivers taking extra long paths to where you wanted to go, driving poorly or charging too much -- because drivers could do that <b>and there was little recourse</b>.  But the thing about these new services, which rely heavily on online reputation systems, is that these reputation systems make the need for such regulations <i>much less necessary</i>.  The services, like Uber, set the price and poor drivers get booted from the system based on user reviews.  And, since most people who have a mobile phone these days to use one of these apps will <i>also</i> have GPS on those phones, people can self-monitor if the driver is taking a reasonable route.  Basically, the <b>original safety reasons</b> (which, again, may have made sense at the time) for many of those regulations simply may not really apply to these new services.  But rather than deal with that, the legacy players are doing what legacy players do: using those regulations to try to stomp out innovation and stifle competition.<br /><br /><a href="http://www.techdirt.com/blog/innovation/articles/20130327/02594322476/taxi-limo-trade-group-hates-innovative-upstarts-labels-them-rogue-applications.shtml">Permalink</a> | <a href="http://www.techdirt.com/blog/innovation/articles/20130327/02594322476/taxi-limo-trade-group-hates-innovative-upstarts-labels-them-rogue-applications.shtml#comments">Comments</a> | <a href="http://www.techdirt.com/blog/innovation/articles/20130327/02594322476/taxi-limo-trade-group-hates-innovative-upstarts-labels-them-rogue-applications.shtml?op=sharethis">Email This Story</a><br />
 ]]></description>
<slash:department>can't-beat-'em-in-the-market,-so...</slash:department>
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<pubDate>Wed, 27 Mar 2013 15:44:00 PDT</pubDate>
<title>Intellectual Ventures Ramping Up Lawsuits</title>
<dc:creator>Mike Masnick</dc:creator>
<link>http://www.techdirt.com/articles/20130326/18291922473/intellectual-ventures-ramping-up-lawsuits.shtml</link>
<guid>http://www.techdirt.com/articles/20130326/18291922473/intellectual-ventures-ramping-up-lawsuits.shtml</guid>
<description><![CDATA[ For many years, even as people correctly noted that Intellectual Ventures was perhaps the world's biggest patent trolling operation, the company insisted that it shouldn't be called a troll, in part because it hadn't actually sued anyone.  That was misleading for a variety of reasons, with the biggest one being the war chest behind IV and the implicit <i>threat</i> of lawsuits certainly got plenty of companies to cough up <i>huge sums</i> to avoid them.  While IV has ridiculously strict nondisclosure agreements, various leaks have suggested companies often pay <i>hundreds of millions of dollars</i> to Intellectual Ventures... for nothing.  All they really get is a promise not to be sued <i>and</i> the potential to dip into IV's big database of mostly useless patents, which the paying companies can then use to sue others.  Overall, Intellectual Ventures admits that it has brought in <b>over $2 billion dollars</b> directly from licensing and another $5 billion in "investments" -- some of which came from companies "buying in."  What a racket, huh?
<br /><br />
Back in 2010, the company finally <a href="http://www.techdirt.com/articles/20101208/11073712190/intellectual-ventures-files-its-first-lawsuits-giant-patent-troll-awakened.shtml">filed</a> its first lawsuits.   Since then it's <a href="http://dockets.justia.com/search?q=Intellectual Ventures II LLC" target="_blank">continued filing lawsuits</a> on an irregular basis.  2011 was a big year, with sudden bursts of lawsuits in July, September and October.  2012 had fewer lawsuits, and just small blasts in February and May.  However, it looks like IV may be ramping up with the lawsuits again.  IV filed three in February (one against Windstream and a few small telcos, one against CenturyLink, Qwest, Embarq, Savvis & CenturyTel, and one against AT&T and various subsidiaries).  However, in the last week or so, it's filed three more lawsuits.  First against Symantec, then against Toshiba, and the latest <a href="http://news.cnet.com/8301-13578_3-57576463-38/intellectual-ventures-sues-canon-ricoh-over-printer-tech/" target="_blank">against Canon and Ricoh</a>.
<br /><br />
The latest one claims that Canon and Ricoh -- two companies, I should remind you, who actually produce printers and actually add value to the world by making products -- are apparently violating some IV patents which have to do with printing.  They claim that Canon (whom they've sued before) infringes on nine patents and Ricoh infringes on seven.
<br /><br />
So, let's ask a simple question: what has Intellectual Ventures contributed to the world of printing?
<br /><br />
We'll wait.
<br /><br />
Okay, it was a trick question: the answer is <b>absolutely nothing</b>. No printer company in the world has relied on some great breakthrough from Intellectual Ventures, nor have they relied on the insight gleaned from a crappy patent that IV bought at some point.  No, printer companies have built and innovated based on their experience in the marketplace <i>selling printers</i>.  Intellectual Ventures is simply trolling and taking away from actual innovators.
<br /><br />
In a truly sickening blog post, Intellectual Ventures' "Chief Litigation Counsel" Melissa Finnocchio tosses out IV's standard "defense" of its indefensible activities:
<blockquote><i>
Since our founding, IV has efficiently and effectively identified strong patents covering significant and relevant inventions, purchased those patents, and marketed and licensed them to companies who need them. A properly functioning patent system is the foundation of IV's business model, along with the sensible notion that a fair price must be paid for use of a patented invention.
</i></blockquote>
Almost nothing in that paragraph is accurate.  IV started out by buying up patents, en masse, from various universities' "tech transfer offices" after those universities spent big time setting up those offices, thinking it would bring in lots of cash.  Then no one wanted those patents (at least not at the ridiculous prices offered) and for nearly <i>every single</i> university tech transfer office they suddenly became seen as a cost center, rather than a profit center as planned.  Enter IV with a giant war chest, agreeing to buy up tons of crappy patents that no one else valued or wanted, on the cheap, and suddenly tech transfer offices can aggregate a bunch of patents and show <i>some</i> money coming in.  IV has never, ever been about "identifying strong patents."  It has always been about finding enough patents they can use to pressure companies into giving them money.  IV's entire business model, from the beginning was built on exploiting a clearly broken patent system by a group of folks who had a history with the system.
<br /><br />
As for a "fair price," a fair price is what someone in the market is willing to pay for a product.  Not what IV gets by bullying companies.  IV has tens of thousands of patents.  We've yet to find a single one that was a key breakthrough which companies relied on to move innovation forward.  Because they don't have any such patents.
<blockquote><i>
Patent infringement, however, continues to be a problem and the patent system cannot work as intended if infringement goes unchecked. When sophisticated companies turn a blind eye to infringement, we are forced to take action to safeguard the value of our patents and to protect the interests of our investors and customers. Infringers need to pay for the inventions they are using. An issued patent provides rights to the patent owner and when these rights are ignored, it impairs the incentives that spur invention and poses a real threat to innovation
</i></blockquote>
That entire paragraph <i>might</i> make sense <i>if</i> the patents in question were (a) unique, clearly defined and definitive breakthroughs and (b) were the main reason why other companies produced the products they did.  However, since (as far as we can tell) every single situation in which IV has sued a company has been because of <i>independent invention</i> by actual practitioners in the field doing <i>what the market asks for</i>, and the patent in question has <b>nothing to do with the actual innovation</b>, it's not just wrong to suggest that "infringers need to pay," it's a gleeful cheering on of a shakedown.
<br /><br />
Finally, the idea that when patent owners <i>don't sue</i> it somehow "impairs the incentives that spur invention and pose a real threat to innovation" has simply no basis in any reality-based discussion.  The problem with the patent system today is the fact that broad and vague patents are being asserted against obvious innovations in the market place.  That is putting a massive tollbooth on innovation.
<blockquote><i>
We enter into litigation after careful deliberation and a thorough analysis of the patents we own and the products we believe to be infringing. The actions we take to protect our rights are with established, patent savvy technology companies &#8211; not start-ups &#8211; and we have reached settlements for significant amounts. In other words, our patent portfolios are being recognized for their validity and relevance to current industries and key technologies.
<br /><br />
IV does not enter litigation lightly, and our actions are not frivolous. Asserting our rights is something IV, and any patent owner must do, when their patents are being used without license.
</i></blockquote>
Shorter version of this paragraph: look we only shakedown big companies with big bank accounts.  The fact that some of them are willing to pay does not mean the patents are recognized for their "validity."  It means that big companies can do the math on the cost of fighting IV in court, and recognize it's cheaper to pay up than deal with the mess.  IV may not enter into litigation lightly, but it's abusing the system, taking billions of dollars out of <i>actual innovation</i> and is the perfect example of everything that's wrong with the patent system.<br /><br /><a href="http://www.techdirt.com/articles/20130326/18291922473/intellectual-ventures-ramping-up-lawsuits.shtml">Permalink</a> | <a href="http://www.techdirt.com/articles/20130326/18291922473/intellectual-ventures-ramping-up-lawsuits.shtml#comments">Comments</a> | <a href="http://www.techdirt.com/articles/20130326/18291922473/intellectual-ventures-ramping-up-lawsuits.shtml?op=sharethis">Email This Story</a><br />
 ]]></description>
<slash:department>a-troll's-gotta-troll</slash:department>
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<pubDate>Tue, 26 Mar 2013 07:57:00 PDT</pubDate>
<title>Crazy Idea Of The Month: Allowing Patents On Mathematics</title>
<dc:creator>Glyn Moody</dc:creator>
<link>http://www.techdirt.com/blog/innovation/articles/20130325/11085322454/crazy-idea-month-allowing-patents-mathematics.shtml</link>
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<description><![CDATA[ <p>
It would be something of an understatement to say that people have strong opinions about patents.  But as Techdirt has reported, there's a growing <a href="https://www.techdirt.com/articles/20121127/11245721156/some-thoughts-fixing-problems-patent-system.shtml">consensus</a> that software patents in particular aren't working -- James Bessen and Michael J. Meurer have written an entire book, "<a href="http://researchoninnovation.org/dopatentswork/">Patent Failure</a>", about how bad things are there, and why it's happening in this area rather than elsewhere.
</p>
<p>
One of the key problems is that software patents are essentially patents on mathematical algorithms -- sets of instructions for carrying out a calculation.  Since it has long been a principle that you can't patent mathematical formulae or laws of nature, there is a tension there: if software is just mathematics, why should you be able to patent it at all?  <a href="http://www.newscientist.com/article/mg21729086.300">New Scientist</a> points to an interesting article in the April 2013 issue of Notices of the American Mathematical Society, in which <a href="http://www.ams.org/notices/201304/rnoti-p475.pdf">David A. Edwards
 proposes a radical way of solving that conundrum</a> (pdf):

<i><blockquote>At present, only those things which are made by man are patentable. Thus, the courts have allowed new forms of bacteria which have been engineered to have useful properties using recombinant DNA techniques to be patented but would not allow such a bacterium to be patented if it were naturally occurring even if it were newly discovered. This is the basis for the nonpatentability of computer programs. They are algorithms, which are essentially mathematical formulas, which -- as everyone  knows -- are "eternal" and hence discovered by man and not created by him. This argument which, to say the least, is philosophically controversial, leads to our present unfortunate policy. From an economic point of view, there is no rationale for distinguishing between discovery and invention, and we would advocate dropping entirely any subject matter restrictions whatsoever on what can be patented. One should be able to patent anything not previously known to man.</blockquote></i>

In particular, he believes it should be <b>possible to patent mathematics, and hence software</b>.
</p>
<p>
One of his arguments is that this would spur people to make more discoveries.  But that presupposes mathematicians aren't trying to do that now for glory, peer esteem and tenure, but there's no evidence to suggest that.  The same argument is sometimes made in support of software patents -- that they stimulate the production of more software.  But that overlooks the fact that the computer industry thrived for decades before the introduction of software patents, and that companies like Microsoft grew into hugely profitable enterprises without them.
</p>
<p>
Indeed, <a href="https://www.nytimes.com/2007/06/09/opinion/09lee.html?_r=0">in 1991 Bill Gates famously warned about the problems that software patents would create for the industry and his company</a>:

<i><blockquote>In a memo to his senior executives, Bill Gates wrote, "If people had understood how patents would be granted when most of today's ideas were invented, and had taken out patents, the industry would be at a complete standstill today." Mr. Gates worried that "some large company will patent some obvious thing" and use the patent to "take as much of our profits as they want."</blockquote></i>

That, of course, is exactly what has happened since the introduction of software patents, leading to <a href="http://www.nytimes.com/2012/10/08/technology/patent-wars-among-tech-giants-can-stifle-competition.html?pagewanted=all&#038;_r=1&#038;">the following situation today</a>:

<i><blockquote>In the smartphone industry alone, according to a Stanford University analysis, as much as $20 billion was spent on patent litigation and patent purchases in the last two years -- an amount equal to eight Mars rover missions. Last year, for the first time, spending by Apple and Google on patent lawsuits and unusually big-dollar patent purchases exceeded spending on research and development of new products, according to public filings.</blockquote></i>

That's bad enough for huge companies with deep pockets; it would be even worse for universities on tight budgets which might suddenly find themselves sued for using mathematical formulae without permission -- a ludicrous situation.  Edwards seems to be aware that this is a problem, and tries to address it as follows:

<i><blockquote>Since patents only give control over the commercial applications of his or her discovery or invention to the patentee, granting patents on mathematical formulas, laws of nature, and natural phenomena would have no negative side effects on pure science.</blockquote></i>

That's not really the case, in the US at least, thanks to <a href="https://en.wikipedia.org/wiki/Research_exemption#Common_law_research_exemption">Madey v. Duke University</a>,
 as Wikipedia explains:

<i><blockquote>In 2002, the Court of Appeals for the Federal Circuit dramatically limited the scope of the research exemption in Madey v. Duke University, 307 F.3d 1351, 1362 (Fed. Cir. 2002). The court did not reject the defense, but left only a "very narrow and strictly limited experimental use defense" for "amusement, to satisfy idle curiosity, or for strictly philosophical inquiry." The court also precludes the defense where, regardless of profit motive, the research was done "in furtherance of the alleged infringer's legitimate business." In the case of a research university like Duke University, the court held that the alleged use was in furtherance of its legitimate business, and thus the defense was inapplicable.</blockquote></i>

Clearly, there is huge scope for inventive lawyers (mathematical trolls?) to bring lawsuits against academics here, which would inevitably have a chilling effect on "pure science".  Far from helping resolve the problems we have today with software patents, extending patentability to the mathematics that underlies programming would simply spread the misery wider, and make the lawyers richer.
</p>
<p>
Follow me @glynmoody on <a href="http://twitter.com/glynmoody">Twitter</a> or <a href="http://identi.ca/glynmoody">identi.ca</a>, and on <a href="https://plus.google.com/100647702320088380533">Google+</a>
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<pubDate>Fri, 22 Mar 2013 10:21:48 PDT</pubDate>
<title>Leaked! MPAA Talking Points On Copyright Reform: Copyright Is Awesome For Everyone!</title>
<dc:creator>Mike Masnick</dc:creator>
<link>http://www.techdirt.com/articles/20130321/18271522414/leaked-mpaa-talking-points-copyright-reform-copyright-is-awesome-everyone.shtml</link>
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<description><![CDATA[ With the possibility of comprehensive copyright reform in the US <a href="http://www.techdirt.com/articles/20130320/14513122401/copyright-office-boss-copyright-law-is-broken-everything-should-be-table-we-love-copyright.shtml">in the air</a>, we warned that lobbyists from all sides were about to be <a href="http://www.techdirt.com/articles/20130315/09225322338/surprise-register-copyrights-expected-to-call-reduction-copyright-term.shtml"><i>very, very</i> busy</a> on Capitol Hill, and it has already begun.  We've heard from very reliable sources that the MPAA has basically been <i>blanketing</i> Congress with the attached document, visiting as many offices as possible and <a href="https://www.documentcloud.org/documents/626435-mpaa-memo-re-copyright-policy-mar-2013.html" target="_blank">leaving it behind</a> as their talking points on why copyright is just freaking awesome.
<br /><br />
Of course, since this is the MPAA, the document is all sorts of misleading.  Let's dig in a bit, shall we?
<blockquote><i>
From the printing press, to motion pictures, to recorded sound, to the Internet, for its entire history, copyright law has evolved and developed in response to new developments in technology and the marketplace.
</i></blockquote>
Well, that's one way to look at.  Another would be, from the player piano, to radio, to TV, to the photocopier, to cable TV, to the VCR, to the MP3 player, to the DVR, to internet video, the entertainment industry has flipped out and used copyright law to try to block the development of new technology and marketplaces, often against their own best interests.  Given that, you'd think that we'd know by now to take the entertainment industry's claims about copyright law and new technologies with a rather large grain of salt.
<blockquote><i>
The result is that today the U.S. copyright system is a cornerstone of a vibrant creative economy that is unparalleled in the world &#8211; adding $631 billion and over 7.5 million direct and indirect jobs in 2010 [Department of Commerce, IP and the U.S. Economy study], and making the United States a world leader in creativity, technological innovation and economic growth.
</i></blockquote>
It wouldn't be the MPAA if it didn't come chock full of bogus stats.  First up, the Commerce Department report -- also known as the <a href="http://www.techdirt.com/articles/20120607/10055319241/feds-say-we-need-stronger-ip-laws-because-grocery-stores-employ-lots-people.shtml">grocery store report</a>, because it counts all 2.5 million employees of grocery stores as being the single largest employer in the "IP intensive industry."  Because, you know, without strong IP laws, that checkout bagger wouldn't have a job.  Of course, this highlights why the whole Commerce Department report is <a href="http://www.techdirt.com/articles/20120412/01530018462/ridiculous-white-house-report-pretends-getting-copyrights-patents-trademarks-means-you-benefit-them.shtml">useless</a>.  It first broadly defines "IP intensive industries" in ways that are simply not credible (see above: Stores, Grocery), and then, ridiculously, suggests that all of the jobs in those industries exist <i>because</i> of existing IP laws, despite no proof of <i>any</i> causal link.
<br /><br />
When you look specifically at "copyright," you see they lump in all sorts of stuff that would be made without copyright -- including advertising, public relations, scientific services, performing arts companies, newspaper reporting, "internet sites" and computer system design.  Yes, some of those probably involve the use of copyright, but how much?  The MPAA doesn't care, it counts them all for its team.
<br /><br />
Second, note the claim that these are "direct and indirect jobs"?  This is a standard trick of the MPAA.  For years they go around citing <a href="http://www.techdirt.com/articles/20121003/01003820577/chris-dodd-hollywoods-most-predictable-dissembler.shtml">"2.1 million jobs"</a> implying that's how many the movie industry employs.  Except, it's not.  The actual number is <a href="http://www.techdirt.com/articles/20111212/02244817037/congressional-research-service-shows-hollywood-is-thriving.shtml">374,000</a>.  So they started adding in a <i>hell of a lot</i> of "indirect jobs," taking credit for the florists and hairdressers and food delivery folks and all of that.  As if "copyright" had anything to do with any of that.
<br /><br />
As for the US being "the leader" in this arena, as recently noted, many of the biggest entertainment companies are actually <a href="https://www.techdirt.com/articles/20130304/02123822183/so-much-protecting-us-interests-most-big-ip-intensive-firms-are-foreign-owned.shtml">foreign owned</a>, meaning that a significant portion of any profits is likely flowing out of the US.
<blockquote><i>
MPAA member companies welcome a continuation of the ongoing discussion of the importance of copyright. We welcome a discussion based on facts, experience, and rational analysis.
</i></blockquote>
Coming right after the bogus numbers and claims, that's a pretty rich statement.
<blockquote><i>
And we are confident that such a discussion will result in a renewed affirmation of the benefits to all of a copyright law that encourages and rewards creativity and breakthrough innovation, promotes distribution and enjoyment of America&#8217;s most beloved stories and characters, and takes a firm stand against the criminals who would rob us of those.
</i></blockquote>
I'm still waiting to see where copyright rewarded breakthrough innovation.  I can give you a long list of where it hindered it.  It's also not at all clear that today's copyright "encourages and rewards creativity."  It clearly rewards <i>some</i> aspect of creativity, but as we've seen a decline in respect, and an increase in infringement, we've also seen a <a href="http://www.techdirt.com/skyisrising/">massive increase</a> in content created.  That, at the very least, suggests that there are other incentives at play.  Furthermore, we reported on a recent study showing musicians making approximately <a href="http://www.techdirt.com/blog/casestudies/articles/20130116/09224321702/just-as-many-musicians-say-file-sharing-helps-them-as-those-who-say-it-hurts.shtml">6% of their revenue</a> from efforts that directly involve the sale of copyrighted works -- suggesting that there are numerous ways of "rewarding creativity" that have little to do with copyright.  In fact, a strong argument can be made that with a focus on copyright, you end up with many fewer creators rewarded.  But when you focus on other methods of supporting artists, the numbers go way up.
<br /><br />
Also, really, if we're going to be talking about a discussion based on "facts" and "rational analysis," we really could do without the bogus and misleading use of words like "criminals" and "rob" for actions that are most frequently civil law issues, at best, and are potentially about <i>infringement</i>, not <i>stealing</i>.  It's the little things like this that determine whether the debate will be an honest one or pure propaganda.

<blockquote><i>
<b>Copyright Empowers Creativity, Innovation and the Dissemination of Knowledge</b><br />
The promise of the opportunity to make a living doing what they love is what gives a creator incentive to transform his or her new ideas into reality and to take that new creation to the public. Creators deserve to be secure in the knowledge that they have a fair chance to earn a wage from their work and investment -- the works that contribute both to our shared culture and our national economy. The Constitution itself recognizes that the public&#8217;s interest in creativity and the dissemination of knowledge is best served by the incentives that result from recognizing authors&#8217; and creators&#8217; rights. If our creative sector is to remain the envy of the world, the law must ensure these public-interest purposes of copyright are not undercut.
</i></blockquote>
The promise of the opportunity to make a living gives creators <b>an</b> incentive to create and distribute their works.  But just one incentive.  And there's fairly strong evidence that it's actually fairly far down the list of incentives that lead to the creation and distribution of creative content.  We have a pretty big wide internet filled with content that was created for no direct remuneration.  For many, many people, the incentive to create is not because of money, but because they can't not create.
<br /><br />
Second, this entire paragraph assumes -- wholly without support -- that copyright is the only way to make money from creation.  That's ridiculous, and easily shown to be false (as noted above with the 6% number).  Lots and lots of people make money via their content without ever needing to make use of the power to exclude granted to them under copyright.
<br /><br />
As for creators deserving a "fair chance to earn a wage from their work and investment," that's absolutely true, but what does that have to do with copyright? After all, under the "old" system that the MPAA used, the vast, vast, vast, vast, vast majority of people who wanted to become filmmakers had <i><b>no chance at all to earn a wage from their work</b></i>, because the only way to make a movie was to have one of the MPAA gatekeepers grant you permission.  The fact is that most people who want to earn a living making content have failed at it.  This has always been the nature of the content business -- and it's a point that the MPAA and other copyright maximalists never want to admit.  Also, considering that thanks to the infamous practice of <a href="http://www.techdirt.com/articles/20121018/01054720744/hollywood-accounting-how-19-million-movie-makes-150-million-still-isnt-profitable.shtml">Hollywood accounting</a>, we're told that most films lose money, then, it seems that the existing system isn't working to the level that the MPAA claims is necessary.
<br /><br />
Finally, the Constitution says no such thing.  It makes no claim that the public's interest is "best served" by copyright.  All it does is <i>allow</i> Congress to create monopoly privileges such as copyright <b>if</b> it believes those serve the public.  That's it.
<blockquote><i>
Take Digital Rights Management technology, for example. Without the protection of effective DRMs, the business incentive to develop new and innovative distribution models, like UltraViolet, across multiple devices and platforms is lost. The technological and legal protections provided by current law allow content to be portable, enabling consumer flexibility on how to access it. Under current copyright law, the choice and cost curves are both bending in the consumer&#8217;s direction.
</i></blockquote>
Try to hold back the laughter here.  After all, we're having a discussion based on "facts, experience and rational analysis."  And, yes, the MPAA is trying to argue that DRM itself is a form of innovation, and they're highlighting Ultraviolet, a crappy DRM system that <a href="http://www.techdirt.com/articles/20111021/12064316454/hollywoods-kinder-gentler-drm-ultraviolet-getting-slammed-reviews.shtml">no one wants</a>, that tries to enable a tiny portion of the benefits that everyone else on the internet figured out how to get for themselves a decade earlier.  That's not innovation.  No one needed UltraViolet DRM to distribute content "across multiple devices and platforms."
<br /><br />
Limiting what consumers can do is never innovation.  It's about trying to limit the impact of actual innovation.
<blockquote><i>
<b>Copyright Benefits Consumers by Promoting Free Markets and Competition</b><br />
Copyright as it is reflected in both the Constitution and in current law recognizes that the public benefits from a competitive environment in which clearly-defined property rights enable the market to drive the creation and dissemination of creative woks. These rights foster competition because they incentivize creators to take risks. They encourage economic development and economic diversity. That&#8217;s good for the consumer and good for the economy.
</i></blockquote>
Yet another trope.  As was aptly discussed in Derek Khanna's <a href="http://www.techdirt.com/articles/20121116/16481921080/house-republicans-copyright-law-destroys-markets-its-time-real-reform.shtml">report</a> for the Republican Study Committee, copyright is the antithesis of promoting a free market.  The problem, here, is that the MPAA is pretending that any monopoly makes sense as "property" to create a market.  But any competent economist will tell you that's hogwash.  We can create all sorts of artificial monopolies to create markets to prove how ridiculous this is.  For example, how about we put a pricing mechanism and the ability to exclude people from accessing air to breathe?  We've now created "property rights" and a "market" for air -- and I'd imagine it would be quite a lucrative one, given the demand.
<br /><br />
And, of course, that would create "a competitive environment" that would "foster competition" by "incentivizing air creators to take risks."
<br /><br />
But, of course, most sensible people would recognize that creating such an exclusionary right for something that is abundant is not a form of a free market, but rather is a massive inefficiency in a functioning free market.
<br /><br />
The MPAA can argue, perhaps with (or perhaps not) reasonable support, that a system of artificial limited scarcity is a better net result, but it's not a free market by any means.   They really should stop pretending it is one, because it really takes away from their point.  They should be arguing the facts: that copyright is basically a mercantilist system of monopolies, emerging from the mercantilist era of protectionism.  They can then make the argument for why that works better than an actual free market, and that would be an interesting debate. But pretending that the exact opposite of a free market is a free market is just silly.
<blockquote><i>
Enforcement of existing copyright laws is also essential to ensure that illegitimate websites that profit from the illegal sale of content do not have an economic advantage over the innovative platforms that our companies develop to deliver high-quality content to consumers. Undermining copyright law would serve as a disincentive for future technological development and would harm consumers.
</i></blockquote>
As has been shown time and time again, infringement is generally a <a href="http://www.techdirt.com/articles/20080109/013441.shtml">leading indicator</a> of innovation.  The reason that there are so-called "illegitimate websites" that are succeeding is based on one factor alone: the industry's own failure to provide convenient services that consumers want.  So they seek other convenient services.  If the industry focused on providing more value (as they grudgingly do over time) they'd easily compete with and beat those illegitimate sites and many more people would pay.  That is, enforcement has been shown to do very little in terms of encouraging technological development.  Infringement, on the other hand, has had a major role in driving many key innovations that are incredibly consumer friendly.
<br /><br />
Look, for example, at the music industry.  The labels fought any digital distribution for years, as newer, more innovative and increasingly convenient "unauthorized" offerings showed up.  Left to their own devices, the labels created two of the worst music distribution services imaginable, <a href="http://www.techdirt.com/articles/20011220/1034207.shtml">MusicNet and PressPlay</a>, which no one bothered to use.  It was only when <i>pushed</i> by competition from better online offerings that the industry finally allowed innovation to happen, leading to increasingly innovative solutions, including things like Spotify today, which owes its history to things like Napster.
<br /><br />
If not for such infringement, consumers would still be living in the dark ages, with the labels trying to keep any serious digital distribution from happening at all.
<blockquote><i>
<b>Copyright Supports an Internet that Works For Everyone</b>
<br />
There are those who would place the value of the Internet at odds with copyright. We reject that false choice. Freedom of expression is at the bedrock of both the Internet and the creative community. In considering policies surrounding the Internet, we need to recognize what the Supreme Court has stated repeatedly &#8211; that copyright is itself an &#8220;engine of free expression.&#8221; Not only does copyright itself promote creativity, but creative content has plays an important role in helping to promote the growth of the Internet. As we look at policy affecting the Internet, we must advance policies to promote an Internet that reflects the values that have been fundamental to us for hundreds of years, including freedom of expression, property rights, and protection of the rights of individuals. Good policy stays true to these values, resisting efforts that would pit one against another and recognizing instead that these values are mutually reinforcing.
</i></blockquote>
I don't think that copyright is at odds with the value of the internet.  It seems to me that it's the MPAA setting up a strawman here.  However, certain aspects and <i>uses</i> of copyright almost certainly do go against the values of the internet, which can be seen in <i>the way people use the internet to inadvertently infringe</i> all the time.  Just look around at how many YouTube videos say <a href="http://www.techdirt.com/articles/20111212/03100217039/no-copyright-intended-coming-generation-who-intrinsically-assumes-remix-sharing-makes-sense.shtml">"no copyright intended"</a> while clearly infringing on someone's copyright.
<br /><br />
As for "the engine of free expression," just because the Supreme Court says something, does not make it a reality.  If we look at the last 100 years of history, and look at how much "expression" was created because of copyright, and compare it to how much "expression" was created because of technology (or, hell, limit it to just the internet), the technology/internet will win by a long shot.
<br /><br />
The internet is, at its core, a tool for expression.  That is undeniable.  And, if we're going to talk about "property rights" and "protection of the rights of individuals" it needs to start with our rights to express ourselves, along with our rights to own what we legally posses.  Copyright has gone against those rights in so many ways.  It stops us from actually owning the music we thought we'd "purchased."  It stops us from modifying our phones or video game consoles.  It stops us from shifting a movie we purchased on DVD to our computer.  So, sure, if we're going to protect "property rights" and the "rights of individuals" let's actually do that.
<br /><br />
The reality, of course, is that's not what the MPAA is asking for at all.  They want to to protect <i>copyrights</i>, not actual property rights.  And they want to protect the exclusionary privileges of the large copyright holders, not the rights of individuals.  However, if they're going to claim that they want to support free expression, property rights and protection of the rights of individuals, then I agree.   I just doubt they'll agree with what that really means.
<blockquote><i>
<b>Copyright Provides Creators with Modern Protections</b><br />
Copyright law evolves over time. The last major overhaul of copyright law was the result of decades of Congressional work, much of it focused on fashioning a law that would be flexible enough to accommodate future technological change. But technology and the marketplace often evolve faster than the law. Fortunately, copyright law also provides the space for the private sector to collaborate to develop more immediate solutions. Content creators and intermediaries can and do engage in meaningful conversations about how to protect a secure, legitimate online environment for both creators and audiences. Any discussion of copyright law must include recognition of the critically important role that voluntary agreements play in ensuring the content and tech industries can both remain nimble in a rapidly-changing world.
</i></blockquote>
The whole basis for this point is misleading.  The role of any system of copyright should not be about <i>protections</i>, but about what creates the greatest overall benefit.  The overall incentives should be aligned.  The public wants great creativity, and creators want to create.  So let's focus on what leads to that result, rather than jumping to the conclusion that "protection" is the key.  Protectionism is often a way of limiting markets, rather than helping them grow to their full potential.  So, why aren't we looking at what will incentivize the most innovation and creativity, rather than what will do the best job of protecting and locking things up?
<br /><br />
As for flexibility -- we agree that any law needs flexibility to adapt to changes in technology, but it's laughable to think that's true today, given how often we've seen the MPAA flip out about changes in technology, and run screaming to Congress that the law isn't working for them.  <a href="http://www.techdirt.com/articles/20120215/04241517766/how-much-is-enough-weve-passed-15-anti-piracy-laws-last-30-years.shtml">15 new anti-piracy laws</a> in the past 30 years?  That's not a flexible system.  A flexible system is one that doesn't insist that every bit of content must automatically be put under a copyright regime.  A flexible system is one that doesn't mean a generation never got to see new works enter the public domain.  A flexible system is one that doesn't tell people that downloading 24 songs may make them liable for over a million dollars.  That's a broken system.
<blockquote><i>
<b>Copyright Provides for Incentives and Accountability</b><br />
The public interest in the creation of and dissemination of creative and innovative products cannot be served in an environment in which some are free to build businesses based on the infringement of the rights of others. As infringement grows more widespread, sound copyright policy must recognize that the solution to such problems is
in society&#8217;s broad interest. Any review of copyright must focus on whether the system as a whole provides for meaningful accountability on the part of those who infringe the rights of others, and whether there are adequate incentives for cooperation and accountability among other stakeholders.
</i></blockquote>
A meaningful system recognizes that infringement is not the problem -- a failure to serve the public with what they want is the problem.  A meaningful system recognizes that spending time, resources and efforts on stopping the unstoppable -- especially when it has little long term impact on the bottom line -- is not a sound or reasonable policy.  The public's interest is being served all the time -- in large parts by innovation that is often driven by these services that the MPAA hates so much.
<br /><br />
And, again, this is the same MPAA that argued that the public's interest would be harmed by the VCR.  And by TV.  And by the DVR.  And by YouTube.  So it is hard to take these claims seriously.
<br /><br />
Hopefully, most of the folks in Congress receiving this particular document will do some research on what's being said, and will realize that the MPAA's position is not one to take seriously.  It is not one based on facts, experience or rational analysis.  It is, instead, based on self-interest of a small sector of the economy -- a few large movie studios with a history of <a href="http://www.techdirt.com/articles/20110912/13500315912/hollywood-accounting-darth-vader-not-getting-paid-because-return-jedi-still-isnt-profitable.shtml">exploiting</a> content creators for their own benefit.  If we're going to have a real discussion on copyright reform, it has to be based on actual facts, not MPAA-style theatrics.<br /><br /><a href="http://www.techdirt.com/articles/20130321/18271522414/leaked-mpaa-talking-points-copyright-reform-copyright-is-awesome-everyone.shtml">Permalink</a> | <a href="http://www.techdirt.com/articles/20130321/18271522414/leaked-mpaa-talking-points-copyright-reform-copyright-is-awesome-everyone.shtml#comments">Comments</a> | <a href="http://www.techdirt.com/articles/20130321/18271522414/leaked-mpaa-talking-points-copyright-reform-copyright-is-awesome-everyone.shtml?op=sharethis">Email This Story</a><br />
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<slash:department>well,-that's-one-way-to-go-about-it</slash:department>
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<item>
<pubDate>Fri, 22 Mar 2013 09:18:48 PDT</pubDate>
<title>India Says: 'There Is No Direct Correlation Between IP And Innovation'</title>
<dc:creator>Glyn Moody</dc:creator>
<link>http://www.techdirt.com/blog/innovation/articles/20130308/00331122248/india-says-there-is-no-direct-correlation-between-ip-innovation.shtml</link>
<guid>http://www.techdirt.com/blog/innovation/articles/20130308/00331122248/india-says-there-is-no-direct-correlation-between-ip-innovation.shtml</guid>
<description><![CDATA[ <p>
Techdirt has been pointing out for years that more patents is not the same thing as more innovation, even though many around the world would have us believe <a href="https://www.techdirt.com/blog/innovation/articles/20121213/08411621378/wipo-celebrates-chinese-patent-explosion-pretends-that-its-innovation.shtml">otherwise</a>.  It seems the message is finally getting through: here's <a href="http://keionline.org/node/1668">a remarkable statement from India on the subject of innovation and small- and medium-sized companies</a>, made at a TRIPS Council meeting:

<i><blockquote>there is no direct correlation between IP and Innovation even for the Small and Medium Industries. The technological progress even in the developed world had been achieved not through IP protection but through focussed governmental interventions like compulsory licenses, cross licensing, government funding, and competition policy. It is unfortunate that some of the technologically developed countries would like to showcase the positive effect of IP on innovation, when historically these countries including the proponents of this Agenda Item have reached this stage of technological development by focussing solely on the development of their own domestic industry without caring for the intellectuals property rights of the foreigners or the right holders. After achieving a high level of development, they are now attempting to perpetuate their hold on their technologies by making a push towards a TRIPS plus regime.</blockquote></i>

The last part is a clear dig at the US, which began as a <a href="https://www.techdirt.com/blog/innovation/articles/20130228/01324622146/yes-us-industrial-revolution-was-built-piracy-fraud.shtml">pirate nation</a>, but is now trying to impose the highest level of protection for intellectual monopolies on countries that are still at an early stage of their development, through the many bilateral treaties it has signed with them, as well as things like ACTA and TPP.  The statement from India goes on:

<i><blockquote>Their agenda is not to create an environment where developing countries progress technologically, but to block their progress through the stringent IP regime. It is therefore essential that the flexibilities provided by the TRIPS Agreement need to be secured at any cost, if the people in the developing countries are to enjoy the benefits of innovations.</blockquote></i>

That is, far from acting as a spur to innovation in countries like India, intellectual monopolies prevent small- and medium-sized companies there from progressing to the point where they are able to compete in global markets with the Western enterprises that are pushing for stricter enforcement of patents and trademarks.  This is why emerging countries would do well to think twice before signing up to restrictive FTAs and wide-ranging agreements like TPP that are specifically designed to keep them at a lower level of technological development.
</p>
<p>
Follow me @glynmoody on <a href="http://twitter.com/glynmoody">Twitter</a> or <a href="http://identi.ca/glynmoody">identi.ca</a>, and on <a href="https://plus.google.com/100647702320088380533">Google+</a>
</p><br /><br /><a href="http://www.techdirt.com/blog/innovation/articles/20130308/00331122248/india-says-there-is-no-direct-correlation-between-ip-innovation.shtml">Permalink</a> | <a href="http://www.techdirt.com/blog/innovation/articles/20130308/00331122248/india-says-there-is-no-direct-correlation-between-ip-innovation.shtml#comments">Comments</a> | <a href="http://www.techdirt.com/blog/innovation/articles/20130308/00331122248/india-says-there-is-no-direct-correlation-between-ip-innovation.shtml?op=sharethis">Email This Story</a><br />
 ]]></description>
<slash:department>they-get-it</slash:department>
<wfw:commentRss>http://www.techdirt.com/comment_rss.php?sid=20130308/00331122248</wfw:commentRss>
</item>
<item>
<pubDate>Fri, 22 Mar 2013 08:01:48 PDT</pubDate>
<title>A Tale Of Two Studies: Can File Sharing Both Harm And Help Sales?</title>
<dc:creator>Mike Masnick</dc:creator>
<link>http://www.techdirt.com/articles/20130321/10201522406/tale-two-studies-can-file-sharing-both-harm-help-sales.shtml</link>
<guid>http://www.techdirt.com/articles/20130321/10201522406/tale-two-studies-can-file-sharing-both-harm-help-sales.shtml</guid>
<description><![CDATA[ In <a href="http://www.techdirt.com/articles/20130321/03312722404/tale-two-studies-file-sharing-hurts-sales.shtml">part one</a> of this series, we looked at a study that suggested that file sharing (mainly via Megaupload) likely harmed the sale and rental of digital movies.  In <a href="http://www.techdirt.com/articles/20130321/09114222405/tale-two-studies-file-sharing-helps-sales.shtml">part two</a>, we looked at a study that suggested that file sharing of music (across many sites) likely <em>helped</em> the sale of digital music.  So is one right and the other one wrong?  Not necessarily.  It's possible both are correct.  Unlike some other studies we've seen, the methodologies used by both studies appear to be fundamentally sound, without any obvious problems.  As with just about <i>any</i> study, both studies correctly note that there is the possibility of unknown or unexplained variables impacting the data.  However, both run through a series of tests to try to eliminate a number of possible outside variables, and both come out with results that suggest their initial arguments are robust.
<br /><br />
So, let's try to look at why the two studies might both be right -- and what that might actually mean.  First off, there's the obvious difference: the first study was about movies, and the second study was about music.  While there are obvious similarities between the two, there are also significant differences, which may also lead to differences in consumption.  Movies, for example, tend to involve more initial commitment, since it takes a lot more time to watch a movie.  Music can be consumed much more easily.  But, for music that people like, they're much more likely to listen to it over and over again, whereas most people will view a movie only once.  Even for movies that people absolutely love, they're likely to consume it many fewer times than corresponding music that people love.  And, on top of that, movies come together as a whole package.  Music, for the past few decades, was packaged as a bundle of songs, in the form of an album.  However, the rise of digital distribution for music has often broken apart that bundle, such that people focus on the single unit of the song, rather than the album.
<br /><br />
In those differences are the seeds of why these two studies could both make sense.  The recording industry, obviously, points to the massive decline in overall revenue from recorded music sales.  That is indisputable.  But, much of that can be explained by the breakup of the album into single song sales.  When you're no longer forced to purchase 10 songs you don't care about just to get to the 2 you do, it shouldn't be any surprise that overall sales revenue may decrease.  At the same time, because people can then spread their interest across <i>more</i> artists, something like file sharing can still increase <i>digital distribution sales</i>, because they sample via unauthorized sites, and then purchase a few songs from those they like best.  The file sharing acts as a way to figure out where they want to spend their money, but because they can spend less to get more, overall sales dropped off.  The market is much more efficient.
<br /><br />
Movies, on the other hand, are somewhat different.  There isn't a great unbundling happening there.  And, often, consuming movies is done for a different reason and in a different manner than consuming music.  Watching a movie is a way to "kill" an evening.  Need something to do?  "Let's watch a movie."  As such, you'd expect movie watching behavior to remain more consistent, as people have the same "void" to fill at a regular interval.  And, while alternatives (such as surfing the internet or playing video games) may fill that void, some percentage of the people will prefer movies -- and if one source of movies goes away, they will look for others, and some percentage of those are likely to switch to a pay service.
<br /><br />
There's one other factor that may impact all of this as well, as hinted at in the post about the first study: the level of development of legal services.  For years, we've seen one thing that is almost certainly true: when there are no legal services available, the amount of unauthorized use increases.  Unauthorized use is almost always an indicator of an <i>under-served</i> audience.  And, if you look the development of online music and movie offerings, authorized music services tend to be a lot further along in creating compelling, user-friendly offerings that people find to be "better than piracy."  There are <i>some</i> movie services that are getting there, but movie services are more likely to be encumbered with DRM and annoying restrictions (e.g. "watch the whole thing in 24 hours or you lose it!").
<br /><br />
If anything, this final point is the most compelling explanation to me for the different results in the two studies -- and why I'm less confident that the results of the first study will hold up in the long term, <i>unless</i> Hollywood finally allows the creation of more user-friendly online movie services (i.e., lower prices and less restrictions, which is where the music services have all gone).  In the music world, more and more people are making the gradual shift to authorized services, because they really do provide a good overall experience.  The file sharing that goes on tends to be complementary to all of this because it is one way that people can further sample and figure out what they like, which they can then support within an authorized context (especially since music people like is played repeatedly).
<br /><br />
With movies, on the other hand, you have less of a need to "sample," since the product is often watched just once.  And there, convenience becomes king.  People will flock to the most convenient offering (convenience being a combination of a variety of factors, which may differ per each individual, but generally include elements of ease of use, pricing, overall selection of movies, ability to view in multiple places, ability to watch at different times, etc.)  For many, Megaupload represented the most convenient offering, and after that went away, other services, sometimes pay services, represented the "next best option."  But, those other services are still at risk of newer <i>more convenient</i> services re-emerging and taking back those movie-watchers.
<br /><br />
In those cases, both studies "make sense," but the lessons they suggest may be somewhat different than the lessons put forth by the supporters of the studies.  The authors and supporters of the MPAA study suggest that this proves that shutting down unauthorized sites is a reasonable goal.  I think that may be looking too narrowly at the results, and discounting how much people are focused on the "most convenient" solution.  An even better solution is to <i>provide more convenient offerings</i>, which would win over customers from unauthorized sites even if they aren't taken down.
<br /><br />
Finally, I wanted to respond to the IFPI, which appeared to <a href="http://www.ifpi.org/content/library/IFPI-response-JRC-study_March2013.pdf" target="_blank">completely freak out</a> about the European Commission study, claiming it was flawed:
<blockquote><i>
IFPI believes the JRC study is flawed and misleading. The findings seem disconnected from 
commercial reality, are based on a limited view of the market and are contradicted by a large 
volume of alternative third party research that confirms the negative impact of piracy on the 
legitimate music business.
</i></blockquote>
The IFPI seems to be responding based on emotion, rather than fact, and possibly a misunderstanding of the data.  The data directly supports the <i>commercial reality</i>, which is that <i>digital music sales</i> have been regularly increasing, which the IFPI itself records quite clearly.  The decrease in overall recording industry revenue (the IFPI is misleading in talking about "the legitimate music business" because they really only mean the portion that is recorded music sales), comes from the decline in the sale of physical music: CDs.  And the study only looked directly at digital distribution, not the impact on CD sales.  The other studies that the IFPI refer to look at the connection between file sharing and CD sales, showing a general decline there, but much of that may just be from people shifting from physical (inefficient and wasteful) distribution to digital (efficient) distribution, in which case you'd expect a decline in overall sales, not because of "piracy" but because of less inefficient bundling and physical manufacturing and distribution costs.
<br /><br />
The IFPI also repeats the <a href="http://www.techdirt.com/articles/20130210/15563721940/lies-damn-lies-statistics-how-bpi-cherry-picks-its-averages-to-pretend-file-sharers-spend-less.shtml">BPI's misreading</a> of the "Kantar Worldpanel" data.  That is, they highlight that many people who fileshare don't buy anything, but then leave out the people who neither fileshare nor buy any music, thus setting up an apples and oranges comparison.  They also cite the debunked HADOPI study, despite the fact that reports have already explained how the impact observed in that study likely had more to do with the introduction of new iPhones rather than HADOPI's three strikes policies.
<br /><br />
But, really, the most ridiculous argument in the IFPI response is at the end:
<blockquote><i>
The fundamental problem of the music 
market place remains as true as ever: why pay for music when you can get it illegally free?
</i></blockquote>
The fact that they still believe this to be true is the real problem with the legacy industry in one simple sentence.  They still think the only way to compete is on price.  That's <i>clearly</i> not true, as seen by the IFPI's <i>own data</i>, which consistently shows that <i>massive numbers of people</i> buy all the time, even when they can get it quite easily for free from unauthorized sources.  As noted above, it's really about convenience -- which is a result of a combination of factors, of which price is merely one.  Creating more authorized services that provide greater convenience than unauthorized sites is the most effective way to fight back.  If the IFPI actually focused on providing more value, rather than freaking out every time piracy was detected, we'd be talking about what an amazing time it was for music today, rather than having this same silly debate all over again.
<br /><br />
In the end, despite the IFPI's whining, these two studies do add valuable data to the debate.  And while they may appear to conflict, I don't think they really do. The results both make sense in context, and viewed from a wider angle they suggest, still, that the best way to respond to unauthorized file sharing is to make authorized service more convenient.<br /><br /><a href="http://www.techdirt.com/articles/20130321/10201522406/tale-two-studies-can-file-sharing-both-harm-help-sales.shtml">Permalink</a> | <a href="http://www.techdirt.com/articles/20130321/10201522406/tale-two-studies-can-file-sharing-both-harm-help-sales.shtml#comments">Comments</a> | <a href="http://www.techdirt.com/articles/20130321/10201522406/tale-two-studies-can-file-sharing-both-harm-help-sales.shtml?op=sharethis">Email This Story</a><br />
 ]]></description>
<slash:department>why,-yes</slash:department>
<wfw:commentRss>http://www.techdirt.com/comment_rss.php?sid=20130321/10201522406</wfw:commentRss>
</item>
<item>
<pubDate>Tue, 19 Mar 2013 17:00:00 PDT</pubDate>
<title>DailyDirt: Basic Science Deserves Some Respect</title>
<dc:creator>Joyce Hung</dc:creator>
<link>http://www.techdirt.com/articles/20101209/09015312207/dailydirt-basic-science-deserves-some-respect.shtml</link>
<guid>http://www.techdirt.com/articles/20101209/09015312207/dailydirt-basic-science-deserves-some-respect.shtml</guid>
<description><![CDATA[ The National Science Foundation, which funds a lot of basic research at American colleges and universities, is facing a <a href="http://www.thefiscaltimes.com/Articles/2013/03/07/How-Sequester-Cuts-to-Science-Could-Hurt-Innovation.aspx#page1">budget cut</a> of $283 million this year, eliminating (up to) ~1,000 research grants. It's a shame because over the years many NSF-funded projects have resulted in discoveries that have turned into commercial products with significant benefits to society. Unfortunately, for people outside the scientific community, it's easy to overlook these impacts when trying to decide where to cut spending. Here are a few examples of why basic science deserves some respect.

<ul>
<li> <a title="http://m.theatlantic.com/politics/archive/2013/03/the-sequester-is-going-to-devastate-us-science-research-for-decades/273925/" href="http://bit.ly/WIfXfR">Sad fact: Funding for basic science research makes up less than 1% of the federal budget.</a> Even sadder is that cutting the small amount the government spends on basic science will have little impact on short-term fiscal goals, but its negative effects on the economy will be felt for decades to come, potentially costing the U.S. billions of dollars in missed future opportunities. [<a href="http://m.theatlantic.com/politics/archive/2013/03/the-sequester-is-going-to-devastate-us-science-research-for-decades/273925/">url</a>]</li>

<li> <a title="http://www.iop.org/cs/page_43644.html" href="http://bit.ly/ZnHwaL">Lasers are an example of how a discovery in basic science can eventually lead to a revolutionary invention.</a> The first laser was built in the 1950s, but practical applications for lasers didn't appear until decades later. Today, lasers are a multi-billion dollar industry and are key to many technologies used in manufacturing, communications, medicine, entertainment, and scientific research. [<a href="http://www.iop.org/cs/page_43644.html">url</a>]</li>

<li> <a title="http://blogs.scientificamerican.com/guest-blog/2013/02/27/there-should-be-grandeur-basic-science-in-the-shadow-of-the-sequester/" href="http://bit.ly/12QEr9a">Cutting funding for basic science research will impact young investigators the most.</a> Actually, brand new tenure-track professors are somewhat insulated because there's always some money set aside for them. It's the just tenured professors that will feel it the most, as they try to compete for grants against the entire population, which includes Nobel laureates, National Academicians, and more well-established researchers. [<a href="http://blogs.scientificamerican.com/guest-blog/2013/02/27/there-should-be-grandeur-basic-science-in-the-shadow-of-the-sequester/">url</a>]</li>

</ul>

If you'd like to read more awesome and interesting stuff, check out this unrelated (but not entirely random!) <a title="http://www.stumbleupon.com/to/stumble/stumblethru:www.techdirt.com" href="http://bit.ly/fagV8c">Techdirt post</a> via StumbleUpon.<br /><br /><a href="http://www.techdirt.com/articles/20101209/09015312207/dailydirt-basic-science-deserves-some-respect.shtml">Permalink</a> | <a href="http://www.techdirt.com/articles/20101209/09015312207/dailydirt-basic-science-deserves-some-respect.shtml#comments">Comments</a> | <a href="http://www.techdirt.com/articles/20101209/09015312207/dailydirt-basic-science-deserves-some-respect.shtml?op=sharethis">Email This Story</a><br />
 ]]></description>
<slash:department>urls-we-dig-up</slash:department>
<wfw:commentRss>http://www.techdirt.com/comment_rss.php?sid=20101209/09015312207</wfw:commentRss>
</item>
<item>
<pubDate>Tue, 12 Mar 2013 20:21:59 PDT</pubDate>
<title>Startups And Innovators Speak Out In Favor Of Fixing CFAA</title>
<dc:creator>Mike Masnick</dc:creator>
<link>http://www.techdirt.com/blog/innovation/articles/20130312/16532722303/startups-innovators-speak-out-favor-fixing-cfaa.shtml</link>
<guid>http://www.techdirt.com/blog/innovation/articles/20130312/16532722303/startups-innovators-speak-out-favor-fixing-cfaa.shtml</guid>
<description><![CDATA[ The good folks over at the EFF have <a href="https://www.eff.org/deeplinks/2013/03/startups-and-innovators-send-letter-congress-demanding-cfaa-reform" target="_blank">posted a letter from a group of startups and innovators to Congress</a> seeking reform of the CFAA (Computer Fraud and Abuse Act), which has been abused for years, most notably and recently, in the case against Aaron Swartz (full disclosure: I helped review the initial letter and helped the EFF get some of the signatures on the letter).  This is important, because, as we have noted, plenty of innovators and entrepreneurs <a href="http://www.techdirt.com/articles/20130311/01575622278/innovators-break-stuff-including-rules-how-gates-jobs-zuckerberg-could-have-been-targeted-like-aaron-swartz.shtml">could have been</a> charged under this law for some of their random hacking experiments, some of which directly led them to create amazing innovations.
<br /><br />
Many people have thought that the tech industry isn't as interested in CFAA reform, since it supposedly protects them in cases where they have been hacked, but that's not the case.  Through out the startup community, I've heard many people who were horrified to learn about the charges against Aaron Swartz, as they quickly realized how easy it would be for a Justice Department official to spin what they themselves were doing into something nefarious sounding.  That does not help innovation.
<br /><br />
No one is in favor of having no rules at all, but clearly the CFAA is outdated, broken and widely abused.  Fixing the law to focus on <i>actual</i> malicious and nefarious attacks would be a huge step forward, not just for the public, but for innovators and entrepreneurs who often build great things by starting with a simple hack.<br /><br /><a href="http://www.techdirt.com/blog/innovation/articles/20130312/16532722303/startups-innovators-speak-out-favor-fixing-cfaa.shtml">Permalink</a> | <a href="http://www.techdirt.com/blog/innovation/articles/20130312/16532722303/startups-innovators-speak-out-favor-fixing-cfaa.shtml#comments">Comments</a> | <a href="http://www.techdirt.com/blog/innovation/articles/20130312/16532722303/startups-innovators-speak-out-favor-fixing-cfaa.shtml?op=sharethis">Email This Story</a><br />
 ]]></description>
<slash:department>good-for-them</slash:department>
<wfw:commentRss>http://www.techdirt.com/comment_rss.php?sid=20130312/16532722303</wfw:commentRss>
</item>
<item>
<pubDate>Tue, 12 Mar 2013 09:50:28 PDT</pubDate>
<title>Innovators Break Stuff, Including The Rules: How Gates, Jobs &#038; Zuckerberg Could Have Been Targeted Like Aaron Swartz</title>
<dc:creator>Mike Masnick</dc:creator>
<link>http://www.techdirt.com/articles/20130311/01575622278/innovators-break-stuff-including-rules-how-gates-jobs-zuckerberg-could-have-been-targeted-like-aaron-swartz.shtml</link>
<guid>http://www.techdirt.com/articles/20130311/01575622278/innovators-break-stuff-including-rules-how-gates-jobs-zuckerberg-could-have-been-targeted-like-aaron-swartz.shtml</guid>
<description><![CDATA[ In a conversation with some folks in the tech industry recently, someone pointed out that nearly every super famous entrepreneur likely could have, at some point, been legitimately accused of violating the Computer Fraud and Abuse Act (CFAA), which is the law that prosecutors used against Aaron Swartz, and is in desperate need of an overhaul.  Over at the EFF, Trevor Timm has a great post exploring how <a href="https://www.eff.org/deeplinks/2013/03/steve-jobs-bill-gates-and-mark-zuckerberg-could-have-all-met-similar-fate-aaron" target="_blank">Steve Jobs, Bill Gates and Mark Zuckerberg all might have faced charges under the CFAA</a>.  You should read the whole thing, but here are a few snippets:
<br /><br />
On Zuckerberg:
<blockquote><i>
In 2006, while a sophomore at Harvard, Zuckerberg <a href="http://www.thecrimson.com/article/2003/11/19/facemash-creator-survives-ad-board-the/">created a website</a> called &#8220;Facemash&#8221; which compared photographs of Harvard&#8217;s entire population, asking users to compare two photos and vote on who looked better. Zuckerberg allegedly got access to these photos by &#8220;hacking&#8221; into each of Harvard&#8217;s nine House websites and then collecting them all on one site. It&#8217;s not clear what this &#8220;hacking&#8221; was, but since the charges against him included &#8220;breaching security,&#8221; it may have fun afoul of the law.
</i></blockquote>
On Jobs:
<blockquote><i>
Columbia Law Professor Tim Wu notes in the <a href="http://www.newyorker.com/online/blogs/newsdesk/2013/01/everyone-interesting-is-a-felon.html">New Yorker</a> that Apple co-founders Steve Jobs and Steve Wozniak, did acts that were &#8220;more economically damaging than, Swartz&#8217;s.&#8221; The two college roommates made what were called &#8220;blue boxes,&#8221; cheap devices that mimicked a certain frequency that allowed them to trick AT&#038;T&#8217;s telephone system into making free long-distance calls. They also sold blue boxes before moving onto bigger and better ideas.
</i></blockquote>
On Gates:
<blockquote><i>
In his autobiography, Allen <a href="http://www.v3.co.uk/v3-uk/news/2044825/paul-allen-spills-beans-gates-criminal-past">told the story</a> of when the two future billionaires &#8220;got hold of&#8221; an administrator password at the company they worked at before starting Microsoft. The company had timeshared computers and Allen and Gates were getting charged for using them for their personal work.
<br /><br />
The two men used the password to access the company's accounts and set about trying to find a free runtime account so that they could carry on programming without having to pay for the time. They also copied the account database for later perusal. However, management got wise to the plan.
<blockquote>"We hoped we'd get let off with a slap on the wrist, considering we hadn't done anything yet. But then the stern man said it could be 'criminal' to manipulate a commercial account. Bill and I were almost quivering."</blockquote>
</i></blockquote>
Of course, defenders of the existing law will argue that these episodes are entirely unrelated to the later greatness that all three of these folks were eventually involved in.  But that's not actually supported by the facts.  Facesmash almost certainly directly led Zuckerberg to Facebook.  And, in the case of Steve Jobs, he specifically <a href="http://www.kottke.org/10/09/woz-and-jobs-phone-phreaks" target="_blank">told an interviewer</a>:
<blockquote><i>
&#8220;Experiences like that taught us the power of ideas&#8230;And if we hadn&#8217;t have made blue boxes, there would&#8217;ve been no Apple.&#8221;
</i></blockquote>
Innovators innovate because they hack away at stuff.  They push boundaries and they try new things to explore uncharted worlds.  Do we really want to be punishing people like that with threats of 35 years in jail? (And, yes, the government absolutely <a href="http://www.techdirt.com/articles/20130306/13444122220/holder-doj-used-discretion-bullying-swartz-press-lacked-discretion-quoting-facts.shtml">did</a> threaten him with 35 years.)<br /><br /><a href="http://www.techdirt.com/articles/20130311/01575622278/innovators-break-stuff-including-rules-how-gates-jobs-zuckerberg-could-have-been-targeted-like-aaron-swartz.shtml">Permalink</a> | <a href="http://www.techdirt.com/articles/20130311/01575622278/innovators-break-stuff-including-rules-how-gates-jobs-zuckerberg-could-have-been-targeted-like-aaron-swartz.shtml#comments">Comments</a> | <a href="http://www.techdirt.com/articles/20130311/01575622278/innovators-break-stuff-including-rules-how-gates-jobs-zuckerberg-could-have-been-targeted-like-aaron-swartz.shtml?op=sharethis">Email This Story</a><br />
 ]]></description>
<slash:department>do-we-want-to-stamp-out-that-kind-of-innovation?</slash:department>
<wfw:commentRss>http://www.techdirt.com/comment_rss.php?sid=20130311/01575622278</wfw:commentRss>
</item>
<item>
<pubDate>Fri, 8 Mar 2013 18:30:00 PST</pubDate>
<title>Is The 'Innovator's Dilemma' About To Get Disrupted By 'Big Bang Disruption'?</title>
<dc:creator>Mike Masnick</dc:creator>
<link>http://www.techdirt.com/blog/innovation/articles/20130228/02061122147/is-innovators-dilemma-about-to-get-disrupted-big-bang-disruption.shtml</link>
<guid>http://www.techdirt.com/blog/innovation/articles/20130228/02061122147/is-innovators-dilemma-about-to-get-disrupted-big-bang-disruption.shtml</guid>
<description><![CDATA[ As some of you know, I'm a big believer in the concepts behind Clayton Christensen's <i>Innovator's Dilemma</i>, which explain how disruptive innovation almost always takes incumbents by surprise.  A few years ago, I even did a <a href="http://www.techdirt.com/articles/20091116/2307256958.shtml">two minute video</a> in which I tried to succinctly explain the innovator's dilemma (an explanation later <a href="https://twitter.com/claychristensen/status/121584573749530625" target="_blank">endorsed</a> by Christensen himself).  The basic idea, if you're unfamiliar with it, is that disruptive innovations often hit the market by appearing to be "worse" than the legacy product, and thus the incumbents tend to ignore it.  They brush it off as being too crappy or too small or too low end or whatever, and they focus on the "high end."  What they often fail to take into account are the basic trend lines.  The disruptive innovator tends to improve their product at a much faster rate, and, at some point, hits the quality level where, even if it's still worse (or possibly significantly worse) than the incumbents' offerings, it's actually <i>good enough</i> for their needs.  When you look at innovative markets through this prism, you can see it happening over and over again.
<br /><br />
So, I read, with much interest, a new piece by Larry Downes (a friend, and someone who has posted here on occasion) and Paul Nunes in the Harvard Business Review about <a href="http://hbr.org/2013/03/big-bang-disruption/ar/1" target="_blank">Big-Bang Disruption</a>, in which they argue that the old Innovator's Dilemma model may be somewhat obsolete.  This is due to a variety of factors, focused around the fact that disruption comes <i>faster</i> than ever before and, these days, frequently comes out of left field -- from someone that people didn't even think was a "competitor."  It's a really good read that basically says that a combination of factors, mainly centered around the ability to build new products and services in almost no time and requiring almost no resources, has allowed for a world in which lots of people are rapidly innovating experiment after experiment, and some of those catch on and go viral in an instant -- frequently disrupting existing players, who never even had a chance to see the disruption coming.
<br /><br />
It's a great piece that I highly recommend for folks who are interested in the nature of disruptive innovation -- though I'll push back on one point.  I really don't see how this conflicts with or is any different than the innovator's dilemma.  It just shows the same basic thing happening more quickly.  The main argument that Downes and Nunes use to argue that this is different doesn't so much focus on the innovator's dilemma, but rather focuses on how incumbents should respond to disruptive innovation.  In the past, it has been argued, that if you understood the dilemma properly, you could spot the disruptive innovator's early, and then move to buy them out or build a viable competitor quickly.  In practice, however, we <i>very rarely</i> see that happen.  The number of legacy players, who have succeeded in responding to disruptive innovation, remains an astoundingly small list.  And I'd argue that part of that is because disruptive innovation always <i>seems</i> to come out of left field and always <i>seems</i> to come much faster than incumbents expect.
<br /><br />
That doesn't detract from the main point of the article, however, which does show how these things are happening faster and faster, and a lot of that is <i>because</i> of the ability to just throw something out there <i>for fun</i>, rather than investing millions of dollars early on in an idea that might never even work.
<blockquote><i>
Right now, at Silicon Valley companies large and small, engineers and product developers are getting together late at night in what are popularly known as &#8220;hackathons.&#8221; Their goal is to see what kind of new products can be cobbled together in a few days. You know, for fun. The innovators are not even trying to disrupt your business. You&#8217;re just collateral damage.
<br /><br />
Twitter, for example, began its commercial life humbly at the 2007 South by Southwest conference, following its invention at a hackathon the year before. Its developers wanted to test sending standard text messages to multiple users simultaneously, an experiment that required almost no new technology. Today the company boasts more than 200 million active users and half a billion tweets a day. Twitter has destabilized everything from the news and information ecosystem to unpopular national governments.
</i></blockquote>
While I think the article underplays this somewhat, a big part of why these Big-Bang Disruptions can succeed in this way has a lot to do with the fact that not only can ideas hit the market incredibly fast, but they can also <i>fail fast</i>.  We're in an environment where so much innovation for new services can not only be built quickly but people can learn and adapt or even shut down just as quickly.  One of the biggest reasons why many people believe Silicon Valley remains the home of so many innovative companies is because there's very little stigma associated with failing.  In many circles it's a badge of honor.  But, in this environment, where it's so easy to create, that means that innovators also get to test a lot of ideas quickly, to throw out the bad ones, and to focus on the winners.  This is so much more productive.  On top of that, Downes and Nunes point out that each of those failures might not really be "failures" so much as priming the demand pump by teaching the market what's possible.
<blockquote><i>
The adoption of disruptive innovations is no longer defined by crossing a marketing chasm. Instead, the innovators collectively get it wrong, wrong, wrong&#8212;and then unbelievably right. That makes it even harder for businesses wed to today&#8217;s products and services. All those failed experiments seem like evidence that the emerging technologies just aren&#8217;t ready. In reality, in today&#8217;s hyperinformed world, each epic failure feeds consumer expectations for the potential of something dramatically better.
</i></blockquote>
The one other bit of insight that I pulled from the article was that this ability to build things quickly and cheaply, but also to do so online, where one can make use of a variety of tools to have a direct relationship with a community, users, customers, etc., means that companies can burst out of the gate with <i>amazing</i> products that aren't just disruptive by being <i>worse</i> than the market leader, but they can actually hit the market while <i>being better</i> than the leader.  The authors write about how various strategy experts in the past have suggested that innovators need to focus on a specific value: be cheaper, be more innovative or be more custom (i.e., most customer focused), but that trying to hit on more than one category will dilute the message and the product.  However, thanks to a variety of new services and products, it's absolutely possible to hit the market while being cheaper, more innovative and more closely connected to the customer.  And that certainly makes it tough to be an incumbent.
<br /><br />
In a separate piece, Downes goes further in explaining the <a href="http://techliberation.com/2013/02/18/what-big-bang-disruption-says-about-technology-policy/" target="_blank">policy implications</a> of this argument, focusing on how these "big bangs" suggest that regulators need to tread even more lightly, as new disruptive services can completely change a market in a very short period of time -- in fact, in time frames that many regulators might not even be able to properly comprehend.
<blockquote><i>
Quickly and efficiently, a predictable next wave of technology will likely put a quick and definitive end to any &#8220;information empires&#8221; that have formed from the last generation of technologies.
<br /><br />
Or, at the very least, do so more quickly and more cost-effectively than alternative solutions from regulation.  The law, to paraphrase Mark Twain, will still be putting its shoes on while the big bang disruptor has spread halfway around the world.
</i></blockquote>
All in all, a very interesting theory with some important points that are worth thinking about.  I look forward to the eventual book on the subject by Downes and Nunes, though I still think that setting it up as somehow a rethinking of the Innovator's Dilemma doesn't quite make sense, as I believe that what they're describing really is just a more detailed explanation of how current tools and technologies have accelerated the innovator's dilemma.  It does, potentially, upset the businesses of those who claim they can train incumbents in how to avoid the innovator's dilemma, but I'd argue most of those efforts were <i>never</i> that successful in the first place anyway.<br /><br /><a href="http://www.techdirt.com/blog/innovation/articles/20130228/02061122147/is-innovators-dilemma-about-to-get-disrupted-big-bang-disruption.shtml">Permalink</a> | <a href="http://www.techdirt.com/blog/innovation/articles/20130228/02061122147/is-innovators-dilemma-about-to-get-disrupted-big-bang-disruption.shtml#comments">Comments</a> | <a href="http://www.techdirt.com/blog/innovation/articles/20130228/02061122147/is-innovators-dilemma-about-to-get-disrupted-big-bang-disruption.shtml?op=sharethis">Email This Story</a><br />
 ]]></description>
<slash:department>perhaps-an-evolution</slash:department>
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<pubDate>Tue, 5 Mar 2013 17:00:00 PST</pubDate>
<title>DailyDirt: Do Not Pass Go, Do Not Collect $200...</title>
<dc:creator>Michael Ho</dc:creator>
<link>http://www.techdirt.com/articles/20101208/01354312183/dailydirt-do-not-pass-go-do-not-collect-200.shtml</link>
<guid>http://www.techdirt.com/articles/20101208/01354312183/dailydirt-do-not-pass-go-do-not-collect-200.shtml</guid>
<description><![CDATA[ Sometimes, a free market doesn't create a thriving bazaar of competition. Occasionally, huge monopolies form, and the result is less competition (and sometimes less innovation). Maybe it doesn't matter if you own Mediterranean and Baltic Avenue, but it could if you have Park Place and Boardwalk. Here are a few examples of monopolies you might run into someday.

<ul>

<li> <a title="http://www.npr.org/blogs/money/2013/02/19/172323211/beer-map-two-giant-brewers-210-brands" href="http://n.pr/YD6Abn">Anheuser-Busch InBev and SABMiller own a lot of beer companies, and Anheuser-Busch InBev wants to buy up Grupo Modelo next.</a> If the deal goes through, 46% of the US beer market would be controlled by a single company. [<a href="http://www.npr.org/blogs/money/2013/02/19/172323211/beer-map-two-giant-brewers-210-brands">url</a>]</li>

<li> <a title="http://www.cbsnews.com/8301-18560_162-57527151/sticker-shock-why-are-glasses-so-expensive/" href="http://cbsn.ws/ZFjecV">Eyeglasses aren't exactly hard to make, but they can be surprisingly expensive for a few grams of plastic.</a> Luxottica is the company behind the glasses that about half a billion people wear, but maybe that will change when Google starts selling its fancy eyewear....  [<a href="http://www.cbsnews.com/8301-18560_162-57527151/sticker-shock-why-are-glasses-so-expensive/">url</a>]</li>

<li> <a title="http://www.theatlantic.com/magazine/archive/1982/02/have-you-ever-tried-to-sell-a-diamond/304575/" href="http://bit.ly/ZFitAD">If you've ever bought (or tried to sell) a diamond, you've probably run across a little company called De Beers.</a> Chemistry professors should curse De Beers for the broadly held myth that a diamond is forever... diamonds are not the most thermodynamically stable form of carbon by a long shot. [<a href="http://www.theatlantic.com/magazine/archive/1982/02/have-you-ever-tried-to-sell-a-diamond/304575/">url</a>]</li>

</ul>

If you'd like to read more awesome and interesting stuff, check out this unrelated (but not entirely random!) <a title="http://www.stumbleupon.com/to/stumble/stumblethru:www.techdirt.com" href="http://bit.ly/fagV8c">Techdirt post</a>.<br /><br /><a href="http://www.techdirt.com/articles/20101208/01354312183/dailydirt-do-not-pass-go-do-not-collect-200.shtml">Permalink</a> | <a href="http://www.techdirt.com/articles/20101208/01354312183/dailydirt-do-not-pass-go-do-not-collect-200.shtml#comments">Comments</a> | <a href="http://www.techdirt.com/articles/20101208/01354312183/dailydirt-do-not-pass-go-do-not-collect-200.shtml?op=sharethis">Email This Story</a><br />
 ]]></description>
<slash:department>urls-we-dig-up</slash:department>
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<pubDate>Sat, 2 Mar 2013 09:00:00 PST</pubDate>
<title>Crowdfunding Picks: Throw Trucks With Your Mind &#038; Other Cool Control Interfaces</title>
<dc:creator>Mike Masnick</dc:creator>
<link>http://www.techdirt.com/blog/innovation/articles/20130301/01541322166/crowdfunding-picks-throw-trucks-with-your-mind-other-cool-control-interfaces.shtml</link>
<guid>http://www.techdirt.com/blog/innovation/articles/20130301/01541322166/crowdfunding-picks-throw-trucks-with-your-mind-other-cool-control-interfaces.shtml</guid>
<description><![CDATA[ For many, many years, we've talked about all kinds of business models, including ideas (and early attempts) at crowdfunding before "crowdfunding' was a word.  Obviously, over the past couple years, Kickstarter has become "a thing," along with a number of other platforms, like IndieGogo, PledgeMusic and many more.  On a nearly daily basis, we get pitches from people running cool crowdfunding projects, but we rarely write about them.  Mostly, I've tried to only write about campaigns where there was something new or instructive about <i>the way the crowdfunding was being done</i> -- rather than the specific product itself.  And yet, we keep seeing all sorts of cool products showing up that aren't necessarily doing anything unique or innovative on the business model side, but are simply unique, innovative and awesome <i>all by themselves</i>.  For a few months now, we've been discussing internally the idea of a weekly series of something like "the five best crowdfunding projects of the week," but just never got around to doing it.  This week, however, we came across three separate projects, all so awesome that they needed to be shared.  Hopefully, we'll be making this into a weekly feature, so enjoy.
<br /><br />
<i>We're still debating (and debating and debating) what to call this new section and when to post it.  This week, we're going with "Crowdfunding Picks" and trying Saturday morning.  But we think there must be a better name than that -- and that the name doesn't necessarily have to be about "crowdfunding," but could just be about awesome innovation or cool projects or... something.  So if you've got any ideas, please leave them in the comments.</i>

<ol>
<li> First up is a game by Lat Ware, called <a href="http://www.kickstarter.com/projects/1544851629/throw-trucks-with-your-mind" target="_blank"><i>Throw Trucks With Your Mind!</i></a>  And, yes, the name is quite descriptive (Lat jokes that we should imagine a world in which <strike><i>Call of Duty</i></strike> <i>Gears of War</i> is called "Hide Behind Chest High Walls," since he appears to prefer games to be named after their key concept).  Lat was able to stop by our offices yesterday and let me try it out, and the game delivers what it promises.  I did, in fact, get to throw some trucks with my mind, and it's pretty awesome.  
<center>
<iframe width="480" height="360" src="http://www.kickstarter.com/projects/1544851629/throw-trucks-with-your-mind/widget/video.html" frameborder="0"> </iframe>
</center>
Lat has hooked up an off the shelf <a href="http://www.neurosky.com/Products/MindWave.aspx" target="_blank">NeuroSky EEG device</a> (which you can buy for about $80) to the game he's developing, and there are different actions that you can perform in the game based on how <i>focused</i> you are and how <i>calm</i> you are -- the two things measured by the NeuroSky.  Moving around and selecting what telekinetic power you have is done via the keyboard.  But staring at a truck and launching it at your enemy to crush them is an amazingly satisfying experience.  You can also do other things like lifting, pulling, super jumping and "slow falling."  As a fun test, Lat effectively has you jump off a cliff, and you fall slower if you remain calm, but if you get excited you fall faster and die.  It's an interesting mental battle to try to keep yourself calm just as you start to fall faster and faster off a cliff.
<br /><br />
I've read some of the discussions online about TTWYM elsewhere, and some were concerned about how much fun the gameplay could really be, and let me just say that there shouldn't be any concern.  After I tested it out for a bit, I called in someone else who works here, and we got to throw trucks at each other with our minds for a while, with the person more focused and more calm person winning.  It's an interesting mental battle of wills when you're trying to kill your colleague by being the most calm.  The game itself can handle up to 32 people at once, either over a LAN or the internet.
<br /><br />
The game itself is just the very rough pre-alpha version, built on the Unreal Development Kit.  But the goal of the Kickstarter project is to bring in a team of kick ass video game artists to turn it into a very different visual experience that's much more whimsical and fun (there's some mockup art on the Kickstarter page).  You can buy the NeuroSky device independently or one of the tiers includes one, but you do need it to play the game -- which may limit the number of folks who can play it early on.  As of right now, the game is about half funded (to the $40,000 Lat is seeking), but it's definitely one of those things that feels like it's from the future, and gets you thinking about all the cool stuff that's going to be possible before very long, even if this example just involves using your mind to fling giant trucks at your friends.
<center>
<iframe frameborder="0" height="380" src="http://www.kickstarter.com/projects/1544851629/throw-trucks-with-your-mind/widget/card.html" width="220"></iframe>
</center>
<br /><br />
</li><li>Okay, move past that ability to throw trucks with your mind, and start thinking about controlling your computer with simple gestures, and then check out the <a href="https://getmyo.com/" target="_blank">MYO</a> device, which has been generating a ton of attention mainly due to its <a href="http://youtu.be/oWu9TFJjHaM" target="_blank">amazing video</a> highlighting how a simple arm band can create all sorts of useful gesture controls.
<center>
<iframe width="560" height="315" src="http://www.youtube.com/embed/oWu9TFJjHaM" frameborder="0" allowfullscreen></iframe>
</center>
For about a year, there's been a lot of buzz about Leap Motion's cool <a href="http://gizmodo.com/5987240/this-sick-3d-gesture-control-hardware-will-only-cost-80">gesture control</a> device, but the MYO may be equally as intriguing, supposedly recognizing different muscle movements in your arm to allow you to do things very easily.  Since it's a wrist band, it can hook up to desktop machines, but also mobile phones or (eventually) something like Google Glass.  The possibilities are pretty limitless.
<br /><br />
When I first saw the video, one of the first things I said to someone was that I was amazed MYO hadn't gone the Kickstarter route, as it just has the <i>feel</i> of a Kickstarter project.  However, they apparently decided to go it alone, and it's working.  The MYO website lets people pre-order the device for $149 and, within a few days, they claim to have received <a href="http://techcrunch.com/2013/02/28/myo-armband-pre-orders/" target="_blank">over 10,000 orders</a>, or $1.5 million.  Not bad.
<br /><br />
With both of these first two items, there are quite reasonable questions that can be raised about execution.  Cool demos are one thing.  Consumer-ready production is a different sort of challenge.  I'm very hopeful that these two companies will succeed, but even if they end up not making it, just the fact that these kinds of offerings are being designed and built (by smaller teams, rather than giant multinationals) is really quite encouraging.  We're about to enter a very interesting era concerning just how we control the electronic devices around us.  The Microsoft Kinect and the Nintendo Wii were just the warmup round.  A ton of innovation is about to appear in this space.
<br /><br />
</li><li>Finally, after those first two items that feel totally revolutionary, this last one might even feel a bit mundane (perhaps I should have put it first on the list!).  But, it certainly caught my attention as soon as I saw it:  It's the <a href="http://www.kickstarter.com/projects/2037429657/almond-80211ac-touchscreen-wifi-router-smart-home" target="_blank">Almond+ Touchscreen WiFi Router / Smart home Hub</a> from Securifi.  Check out the video first:
<center>
<iframe width="480" height="360" src="http://www.kickstarter.com/projects/2037429657/almond-80211ac-touchscreen-wifi-router-smart-home/widget/video.html" frameborder="0"> </iframe>
</center>
Almond already has a quite successful (and hugely popular) <a href="http://www.amazon.com/gp/product/B0087NZ31S/ref=as_li_ss_tl?ie=UTF8&#038;camp=1789&#038;creative=390957&#038;creativeASIN=B0087NZ31S&#038;linkCode=as2&#038;tag=techdirtcom-20">touchscreen wireless router</a><img src="http://www.assoc-amazon.com/e/ir?t=techdirtcom-20&#038;l=as2&#038;o=1&#038;a=B0087NZ31S" width="1" height="1" border="0" alt="" style="border:none !important; margin:0px !important;" />, but this takes it up a notch by also adding in a smart home hub, and making the whole thing beautiful.
<br /><br />
This caught my attention for a couple reasons -- one practical and one inspirational.  First, on the practical side, I'd actually just been exploring some of the latest in home automation.  My house has an electronic door lock with a punch-button code, courtesy of its previous owner, and it's really handy, but a little simplistic and clunky.  It can only store two codes, and we're constantly replacing the batteries.  So I recently went looking around to see if the technology had advanced much in the past few years and, lo and behold, it appears that there are a growing number of "smart home" door locks that look similar but have a bunch of other cool features, such as the ability to receive email or text alerts when someone opens your door, or (much more useful) the ability to "schedule" codes to give people limited access, even from far away.  But, for that to work, you need both the new door lock and a Z-Wave controller, which adds up in price.  However, the Almond+ (beyond looking awesome) includes both a WiFi router <i>and</i> both Z-Wave and ZigBee support.  And all that for less than the cost of just about any Z-Wave hub on its own.  Just the Z-Wave part of this makes it really tempting for anyone interested in exploring the home automation field.
<br /><br />
The second reason it caught my attention was that it got me rethinking the home router a bit.  My current WiFi router is shoved in a closet, where it belongs, because it's an ugly box with blinking LEDs.  But the Securifi guys have turned the home router into something that <i>looks really good</i> and is the kind of thing that people would be proud to display out in the open.  As we move towards a world where we have increasingly connected systems and devices, it strikes me as an interesting idea to actually make the central router/hub devices <i>look good</i> from a design standpoint -- because historically that's almost never been a part of the goal.  As such, it makes me wonder how we'd treat our devices differently when we're not ashamed of them, but happy to display them.
<br /><br />
The Almond+ has already far surpassed its goal on Kickstarter, but still seems to be going strong.
<center>
<iframe frameborder="0" height="380" src="http://www.kickstarter.com/projects/2037429657/almond-80211ac-touchscreen-wifi-router-smart-home/widget/card.html" width="220"></iframe>
</center>
</li></ol>
And, that's the kickoff of our exploration of some cool crowdfunded projects that popped onto our radar screen this week.  Let us know if you like this concept or how we might change and improve it (and what to call it), and hopefully we'll start making it a regular thing.<br /><br /><a href="http://www.techdirt.com/blog/innovation/articles/20130301/01541322166/crowdfunding-picks-throw-trucks-with-your-mind-other-cool-control-interfaces.shtml">Permalink</a> | <a href="http://www.techdirt.com/blog/innovation/articles/20130301/01541322166/crowdfunding-picks-throw-trucks-with-your-mind-other-cool-control-interfaces.shtml#comments">Comments</a> | <a href="http://www.techdirt.com/blog/innovation/articles/20130301/01541322166/crowdfunding-picks-throw-trucks-with-your-mind-other-cool-control-interfaces.shtml?op=sharethis">Email This Story</a><br />
 ]]></description>
<slash:department>thinking-forward</slash:department>
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