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<title>Techdirt. Stories filed under &quot;patents&quot;</title>
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<image><title>Techdirt. Stories filed under &quot;patents&quot;</title><url>http://www.techdirt.com/images/td-88x31.gif</url><link>http://www.techdirt.com/</link></image>
<item>
<pubDate>Mon, 13 May 2013 12:49:00 PDT</pubDate>
<title>Monsanto Wins Case Of Seed Patents; Planting Your Own Legally Purchased &#038; Grown Seeds Can Be Infringing</title>
<dc:creator>Mike Masnick</dc:creator>
<link>http://www.techdirt.com/articles/20130513/12113523062/monsanto-wins-case-seed-patents-planting-your-own-legally-purchased-grown-seeds-can-be-infringing.shtml</link>
<guid>http://www.techdirt.com/articles/20130513/12113523062/monsanto-wins-case-seed-patents-planting-your-own-legally-purchased-grown-seeds-can-be-infringing.shtml</guid>
<description><![CDATA[ We've written a few times now about Vernan Bowman's <a href="http://www.techdirt.com/articles/20110927/01185716104/monsanto-wins-patent-dispute-against-farmer-who-bought-legal-seeds.shtml">legal fight</a> against Monsanto, concerning patents over so-called "Roundup Ready" seeds, which Monsanto has patented.   Here's the quick version of the details from an earlier post:
<blockquote>
The farmer, Vernan Bowman, bought official Monsanto seeds and planted his crops. Yet, Monsanto has rules that say you can't re-use "Roundup Ready" seeds, but you can apparently sell "second-generation" seeds to grain elevators for use as "commodity seeds," and doesn't require that there be any restriction on the sale. Bowman later bought a bunch of such "commodity seeds," which included some Roundup Ready seeds, and some that weren't. Bowman was able to determine which of the plants came from Roundup Ready seeds... and then saved those seeds for replanting. Monsanto claimed this was infringement, even though the seeds were legally sold to the grain elevator and then from the elevator to Bowman without restrictions. On top of that, while Bowman had signed an agreement for his original seeds, he did not with this batch (and, indeed, even Monsanto admits he didn't break the user agreement -- just patent infringement for using the seeds).
</blockquote>
Note the key things here.  Bowman did not break any license agreement over seeds that he bought.  He also legally purchased other seeds that had been legally provided to grain elevators to be sold.  All he did was plant those legally purchased seeds, for which he was not violating any license agreement, and then harvest and replant the seeds that came from them.  And this, apparently, is illegal under our patent system.
<br /><br />
Given the fire power that came out in support of Monsanto -- including the federal government -- it shouldn't come as a huge surprise that <a href="http://www.supremecourt.gov/opinions/12pdf/11-796_c07d.pdf" target="_blank">the Supreme Court just gave a complete and total victory to Monsanto</a>.  The key issue was whether or not this was a case of "patent exhaustion."  There was a key case a few years ago that <i>mostly</i> said that once a patent holder sells a product, the patent is <a href="http://www.techdirt.com/articles/20080609/1104171346.shtml">"exhausted"</a> so that the patent holder can't demand licensing fees up and down the supply chain.  However, they distinguish this case by saying that this is different because it's a "copy" of the legally purchased seed.  I could see how that would make sense if we were talking about someone building a copy of a machine in a garage or something, but this is a <i>seed</i>.  Copying itself is <i>what seeds do</i>.  That's kind of their entire purpose.
<br /><br />
Yet, throughout the decision, the court (with a decision written by Justice Kagan) acts as if Bowman just built a replica.  But that ignores the fact that this is nature we're talking about seeds that replicate themselves naturally, because that's what seeds do.  The court has no problem with this, but it seems somewhat ridiculous that someone can legally buy something, have it do what it naturally does (and has done for nearly all of history) and then be told that violates a patent.  When addressing Bowman's point concerning the fact that seeds by nature, replicate themselves, they basically brush that aside by noting that Bowman then harvested them.  As if he's supposed to ignore what's happening?
<blockquote><i>
But we think that blame-the-bean 
defense tough to credit. Bowman was not a passive observer of his soybeans&#8217; multiplication; or put another way,
the seeds he purchased (miraculous though they might be
in other respects) did not spontaneously create eight successive soybean crops. As we have explained... Bowman devised and executed a novel way to harvest
crops from Roundup Ready seeds without paying the usual
premium.
</i></blockquote>
The decision keeps restating the myth that patent holders wouldn't innovate if they weren't blocked from any and all competition.
<blockquote><i>
That is because, once again, if simple copying were a
protected use, a patent would plummet in value after the 
first sale of the first item containing the invention. The 
undiluted patent monopoly, it might be said, would extend 
not for 20 years (as the Patent Act promises), but for only 
one transaction. And that would result in less incentive 
for innovation than Congress wanted. Hence our repeated
insistence that exhaustion applies only to the particular 
item sold, and not to reproductions.
</i></blockquote>
That's a pretty bold statement, and one not supported by any evidence.  There are plenty of reasons to innovate that have little to do with patents, and <i>competition</i> in the marketplace is a big one.  The process Bowman used above may have created some competition for Monsanto, but hardly in a way that destroyed the value of the patent.  Monsanto was still first to market and still could control various uses via licensing agreements.  Furthermore, the process that Bowman went through was inexact and required a few years of harvests.
<br /><br />
The one thing that the ruling does say,  however, is that no one should take this ruling to apply to other self-replicating products, such as technology:
<blockquote><i>
Our holding today is limited&#8212;addressing the situation before us, rather than every one involving a self-replicating product. We recognize that such inventions
are becoming ever more prevalent, complex, and diverse. 
In another case, the article&#8217;s self-replication might occur
outside the purchaser&#8217;s control. Or it might be a necessary
but incidental step in using the item for another purpose. 
... (&#8220;[I]t is not [a copyright] infringement for the owner of a copy of a computer program 
to make . . . another copy or adaptation of that computer
program provide[d] that such a new copy or adaptation is 
created as an essential step in the utilization of the computer program&#8221;). We need not address here whether or 
how the doctrine of patent exhaustion would apply in such 
circumstances. 
</i></blockquote>
While it's good that they acknowledge this, you can bet that this case will be cited heavily when the same issue comes up in court concerning self-replicating software and hardware...<br /><br /><a href="http://www.techdirt.com/articles/20130513/12113523062/monsanto-wins-case-seed-patents-planting-your-own-legally-purchased-grown-seeds-can-be-infringing.shtml">Permalink</a> | <a href="http://www.techdirt.com/articles/20130513/12113523062/monsanto-wins-case-seed-patents-planting-your-own-legally-purchased-grown-seeds-can-be-infringing.shtml#comments">Comments</a> | <a href="http://www.techdirt.com/articles/20130513/12113523062/monsanto-wins-case-seed-patents-planting-your-own-legally-purchased-grown-seeds-can-be-infringing.shtml?op=sharethis">Email This Story</a><br />
 ]]></description>
<slash:department>this-is-the-world-we-live-in</slash:department>
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<pubDate>Fri, 10 May 2013 19:39:00 PDT</pubDate>
<title>10 Judges, 135 Pages Of Ruling About Software Patents... And Zero Clarification</title>
<dc:creator>Mike Masnick</dc:creator>
<link>http://www.techdirt.com/articles/20130510/15454323039/appeals-court-issues-135-page-ruling-software-patents-that-answers-almost-nothing.shtml</link>
<guid>http://www.techdirt.com/articles/20130510/15454323039/appeals-court-issues-135-page-ruling-software-patents-that-answers-almost-nothing.shtml</guid>
<description><![CDATA[ Okay, we know that the Court of Appeals for the Federal Circuit (CAFC) has quite the reputation for mucking up rulings concerning patents over the years.  In fact, there's a strong argument to be made that <i>CAFC</i> is <a href="http://www.techdirt.com/articles/20121001/03314720555/rogue-court-that-made-patents-so-destructive.shtml">a key reason</a> that our patent system is so screwed up today.  So, leave it to CAFC to issue one of <a href="http://www.cafc.uscourts.gov/images/stories/opinions-orders/11-1301.Opinion.5-8-2013.1.PDF" target="_blank">the most bizarre and useless rulings</a> ever concerning software patents.  The specific case is CLS Bank v. Alice Corp, and we had noted this was a <a href="http://www.techdirt.com/articles/20121209/23290021318/appeals-court-gets-yet-another-shot-fixing-software-patent-problem.shtml">chance</a> for CAFC to actually fix the software patents problem, though the oral hearings suggested a <a href="http://www.techdirt.com/articles/20130208/13303621923/key-case-about-software-patents-may-hinge-how-you-define-significantly-more.shtml">very conflicted</a> court, and that's certainly what came out in the ruling.  Or, rather, I should say: rulings.
<br /><br />
The document is 135 pages... but the only part that actually matters is <i>one single paragraph</i> that was issued "per curiam" (i.e., by the whole court, but without anyone being named):
<blockquote><i>
Upon consideration en banc, a majority of the court affirms the district court&#8217;s holding that the asserted method and computer-readable media claims are not directed to eligible subject matter under 35 U.S.C. &sect; 101. An equally divided court affirms the district court&#8217;s holding that the asserted system claims are not directed to eligible subject matter under that statute.
</i></blockquote>
Basically, a majority of the court agreed with the district court that the "invention" in the patent in question -- about using a computer to basically do "shadow transactions" to net out a deal to make sure that all funds are available -- was patent ineligible subject matter.  This is what the district court had found, saying that it was just an "abstract idea."  The original CAFC appeal had overturned that, saying that it was patentable subject matter.  This was a rehearing "en banc" with 10 CAFC judges.  Notice that 10 is an even number.  Meaning, you could have a split court.  Or, you could have a court in total disarray, which is what came out here.  Even though they (mostly) agreed that the specific claims here are not eligible for a patent, the court disagreed on why or how or what color the sky is, basically.
<br /><br />
There are <b>seven</b> (count 'em) different opinions issued in the document, none of them meaning anything, because none of them -- other than that one paragraph above, have more than the majority in agreement.
<br /><br />
Even where they agree, they disagree, and make something of a mockery of the whole system.  Dennis Crouch at Patently-O <a href="http://www.patentlyo.com/patent/2013/05/cls-bank-v-alice-corp-court-finds-many-software-patents-ineligible.html" target="_blank">summarizes it thusly</a>:
<blockquote><i>
All of the judges recognized that the test for patent eligibility under section 101 should be &#8220;a consistent, cohesive, and accessible approach&#8221; that provides &#8220;guidance and predictability for patent applicants and examiners, litigants, and the courts.&#8221;  However, the judges hotly disagree as to the pathway that will lead to that result. 
</i></blockquote>
That's kind of funny (or ridiculously distressing) when you think about it.  The court is saying we need a clear and consistent approach to figuring out what is patentable, and the court feels that it needs to give very clear guidance to everyone about it... and then goes on to absolutely disagree on every key point within that.  The end result is that while they agree we need consistent, cohesive and accessible guidance, they fail to offer any, and actually do the opposite, providing a huge mess.
<br /><br />
Five of the judges did make a fairly interesting ruling, which would greatly limit software patents.  It notes that:
<blockquote><i>
... simply appending
generic computer functionality to lend speed or efficiency
to the performance of an otherwise abstract
concept does not meaningfully limit claim scope for purposes
of patent eligibility.... At its most
basic, a computer is just a calculator capable of performing
mental steps faster than a human could. Unless the
claims require a computer to perform operations that are
not merely accelerated calculations, a computer does not
itself confer patent eligibility. In short, the requirement
for computer participation in these claims fails to supply
an &#8220;inventive concept&#8221; that represents a nontrivial, nonconventional
human contribution or materially narrows
the claims relative to the abstract idea they embrace.
</i></blockquote>
Basically, just adding "on a computer" shouldn't make a general idea patentable.  That's good.  If only they could have found a sixth judge to support it.   Instead, you get the following table of contents:
<blockquote><i>
Opinion for the court filed PER CURIAM.
<br /><br />
Concurring opinion filed by LOURIE, Circuit Judge, in
which DYK, PROST, REYNA, and WALLACH, Circuit Judges,
join.
<br /><br />
Concurring-in-part and dissenting-in-part opinion filed by
RADER, Chief Judge, LINN, MOORE, and O&#8217;MALLEY, Circuit
Judges, as to all but part VI of that opinion. RADER, Chief
Judge, and MOORE, Circuit Judge, as to part VI of that
opinion.
<br /><br />
Dissenting-in-part opinion filed by MOORE, Circuit Judge,
in which RADER, Chief Judge, and LINN and O&#8217;MALLEY,
Circuit Judges, join.
<br /><br />
Concurring-in-part and dissenting-in-part opinion filed by
NEWMAN, Circuit Judge.
<br /><br />
Dissenting opinion filed by LINN and O&#8217;MALLEY, Circuit
Judges.
<br /><br />
Additional reflections filed by RADER, Chief Judge.
</i></blockquote>
And, basically, all of this means nothing.  It doesn't help to wipe out or clarify software patents at all.  It doesn't really help anyone.  It probably doesn't make anyone on any side of this issue happy.  It just leads to more confusion.
<br /><br />
However, as Julie Samuels at the EFF notes, hopefully this will help make it clear to the Supreme Court that <a href="https://www.eff.org/deeplinks/2013/05/hey-supreme-court-its-time-take-software-patents" target="_blank">it finally needs to issue a clear ruling on software patents</a>, after completely <a href="http://www.techdirt.com/articles/20100628/0759029989.shtml">punting</a> the last time it had a chance.<br /><br /><a href="http://www.techdirt.com/articles/20130510/15454323039/appeals-court-issues-135-page-ruling-software-patents-that-answers-almost-nothing.shtml">Permalink</a> | <a href="http://www.techdirt.com/articles/20130510/15454323039/appeals-court-issues-135-page-ruling-software-patents-that-answers-almost-nothing.shtml#comments">Comments</a> | <a href="http://www.techdirt.com/articles/20130510/15454323039/appeals-court-issues-135-page-ruling-software-patents-that-answers-almost-nothing.shtml?op=sharethis">Email This Story</a><br />
 ]]></description>
<slash:department>wtf?</slash:department>
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<pubDate>Thu, 9 May 2013 23:13:09 PDT</pubDate>
<title>How Investor-State Dispute Resolution Threatens Access To Medicines, And Much Else</title>
<dc:creator>Glyn Moody</dc:creator>
<link>http://www.techdirt.com/articles/20130505/02445622949/how-investor-state-dispute-mechanisms-threaten-access-to-medicine-much-else.shtml</link>
<guid>http://www.techdirt.com/articles/20130505/02445622949/how-investor-state-dispute-mechanisms-threaten-access-to-medicine-much-else.shtml</guid>
<description><![CDATA[ <p>
A couple of weeks ago, we wrote about the growing importance of <a href="https://www.techdirt.com/articles/20130411/09574122678/investor-state-dispute-resolution-sleeping-monster-inside-free-trade-agreements-begins-to-stir.shtml">investor-state dispute resolution</a> in so-called free trade agreements (FTAs).  One of the most troubling aspects is how potentially it can be used to undo the hard-won gains for important areas like access to medicines. The US law professor Brook K. Baker, whose work we <a href="https://www.techdirt.com/articles/20121024/11342420811/will-proposed-pan-africa-intellectual-property-organization-enable-west-to-impose-its-monopolies.shtml">discussed</a> last year, has written <a href="http://www.equilibri.net/nuovo/articolo/investors%E2%80%99-ip-rights-unbound-danger-investment-clauses-access-medicines">an excellent exploration of this under-appreciated risk</a>.  After an introduction running through the recent wins in the field of access to medicines -- a <a href="https://www.techdirt.com/articles/20130401/09233022536/indian-supreme-court-rejects-evergreening-pharma-patents.shtml">topic</a> that we've covered extensively here on Techdirt -- he explains how big pharma could employ investor-state dispute resolution to thwart these and similar moves to protect health:

<i><blockquote>Using loose and imprecise standards addressing "minimum standards of treatment," "indirect expropriation," and "national treatment," multinational pharmaceuticals might claim that denying patents, granting oppositions, revoking patents, issuing compulsory licenses, and registering generics while referencing clinical data or doing so before patent expiration all violate their legitimate expectations for profit. Although the "minimum standards of treatment" clause [used to justify recourse to investor-state dispute resolution] was originally designed to prevent grossly abusive and discriminatory courtroom adjudications totally outside the bounds of normative due process, it has morphed to decisions with a much more lenient standard that rewards investors even when they have been given a full panoply of due process safeguards. The expropriation standard, originally adopted to deter nationalization of businesses and seizures of real property has similarly morphed to prevent indirect expropriations, what we call regulatory takings in the U.S., where changes in government regulations -- many designed to protect public health, environment, and other legitimate public interests -- are challenged as having diluted the investor's expectations of profit. Finally, the national treatment standard, though originally adopted to ensure that foreign investors are treated equivalently to domestic investors, is also morphing in new directions.</blockquote></i>

As this makes clear, what started out as a series of measures for a few special cases in order to protect Western companies in countries with weak legal systems and a high risk of tangible investments being expropriated by the state, has been twisted to an entirely different use: enabling deep-pocketed multinationals to circumvent any kind of legislation they don't like, even in countries with <a href="https://www.techdirt.com/articles/20130208/03441521918/canada-denies-patent-drug-so-us-pharma-company-demands-100-million-as-compensation-expropriation.shtml">fair and independent judiciaries</a>.
</p>
<p>
Baker concludes by offering some advice for nations involved in FTA negotiations with clauses that that call for investor-state dispute resolution to be put in place:

<i><blockquote>India and other trade negotiators should heed the entreaties of trade, IP, and health activists who are warning against the inclusion of an Investment Clause in the EU-India FTA, the Trans-Pacific Partnership Agreement, and in the many other trade agreements that are underway or soon-to-be initiated. Preferably, investment chapters will be rejected in their entirety, as they are becoming a corporate sword of Damocles that hangs over the head of rich and poor governments alike. At the very least, IP should be totally defined out of "investments" and no investor claims whatsoever should be available for alleged frustration of IP-based expectations. IP right holders already have multiple forms of enforcement including private lawsuits, border seizures, criminal prosecution, and state-state dispute resolution. Enough is enough. Expanded and unbound investment rights for Big Pharma under the cover of underscrutinized investment chapters is a grave threat -- a threat with deadly consequences to millions of patients who rely on governments' rights to regulate IPRs and to use any and all TRIPS-compliant flexibilities to ensure affordable access to medicines for all.</blockquote></i>

Worrying, few are even aware that the investor-state dispute resolution option exists, let alone its unprecedented power to circumvent government policy and override judicial decisions.  That makes it all-too easy for negotiators to agree to its inclusion in trade agreements as an apparently minor concession that can be used as a bargaining chip to obtain measures they care more about.  Let's hope that Baker's excellent contribution to the debate will alert people to this crucial area, and encourage others to speak up about the very real danger investor-state dispute resolution represents to a wide range of public interest issues.
</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/articles/20130505/02445622949/how-investor-state-dispute-mechanisms-threaten-access-to-medicine-much-else.shtml">Permalink</a> | <a href="http://www.techdirt.com/articles/20130505/02445622949/how-investor-state-dispute-mechanisms-threaten-access-to-medicine-much-else.shtml#comments">Comments</a> | <a href="http://www.techdirt.com/articles/20130505/02445622949/how-investor-state-dispute-mechanisms-threaten-access-to-medicine-much-else.shtml?op=sharethis">Email This Story</a><br />
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<slash:department>time-to-wake-up</slash:department>
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<pubDate>Thu, 9 May 2013 14:17:04 PDT</pubDate>
<title>New Zealand To Ban Software Patents 'As Such'; Tries To Pin Down What On Earth That Means</title>
<dc:creator>Glyn Moody</dc:creator>
<link>http://www.techdirt.com/articles/20130509/09013323019/new-zealand-bans-software-patents-as-such-tries-to-pin-down-what-earth-that-means.shtml</link>
<guid>http://www.techdirt.com/articles/20130509/09013323019/new-zealand-bans-software-patents-as-such-tries-to-pin-down-what-earth-that-means.shtml</guid>
<description><![CDATA[ <p>
Few patent sagas have been as fraught as New Zealand's attempt to revise its laws to exclude software.  Techdirt <a href="https://www.techdirt.com/articles/20100330/1852558798.shtml">first</a> wrote about this move in March 2010, and <a href="https://www.techdirt.com/articles/20100623/0224529933.shtml">again</a> in June 2010, when it seemed that lobbyists had convinced the New Zealand government to reverse its position and allow software patents.  Then, a month after that, word was that software would <a href="https://www.techdirt.com/articles/20100714/23550310221.shtml">indeed</a> be unpatentable. Things went quiet for a while, until <a href="https://www.techdirt.com/articles/20120828/18111920199/two-years-later-lobbying-microsoft-ibm-creates-loophole-new-zealand-to-allow-software-patents.shtml">a new version of the proposed law</a> was <a href="http://www.nzherald.co.nz/technology/news/article.cfm?c_id=5&#038;objectid=10863604">unveiled by New Zealand's Commerce Minister Craig Foss</a>, apparently weakening the bill once more:

<i><blockquote>His amendment has changed some crucial wording in the bill that some say has the government moving away from excluding software from being patented (as per select committee recommendations), to parts of the bill being sufficiently vague that software may indeed become patentable. Clause 10a of the supplementary order paper 120 was amended to read: "..prevents anything from being an invention for the purposes of this Act only to the extent that a patent or an application relates to a computer program as such"</blockquote></i>

The two words "as such" tacked on at the end there are precisely the same as those that are found in <a href="http://www.epo.org/law-practice/legal-texts/html/epc/2010/e/ar52.html">Article 52 of the European Patent Convention</a> that also excludes software patents:

<i><blockquote>(1) European patents shall be granted for any inventions, in all fields of technology, provided that they are new, involve an inventive step and are susceptible of industrial application.
<br /><br />
(2)
The following in particular shall not be regarded as inventions within the meaning of paragraph 1:
<br /><br />
&#8230;
<br /><br />
(c)
schemes, rules and methods for performing mental acts, playing games or doing business, and programs for computers;
<br /><br />
&#8230;
<br /><br />
(3)
Paragraph 2 shall exclude the patentability of the subject-matter or activities referred to therein only to the extent to which a European patent application or European patent relates to such subject-matter or activities as such.</blockquote></i>

As that makes clear, "programs for computers" are not regarded as inventions, and are therefore ineligible for software patents in Europe.  But that only applies to programs "as such": the trouble is, nobody really knows what those two words mean in this context, which has allowed lawyers to obtain thousands of software patents in the EU on the grounds that they weren't software patents "as such".
</p>
<p>
The appearance of precisely these same two words in the draft of New Zealand's patent law was naturally deeply troubling for the local software industry, since they threatened to provide a way to circumvent the ban as they had in Europe.  And so another round of lobbying began, as reported here by Guy Burgess in <a href="http://www.iitp.org.nz/newsletter/article/430">an informative post on the subject</a>:

<i><blockquote>The local IT community mounted a concerted pushback on the unclear "as such" amendment. An industry petition (backed by key groups IITP, InternetNZ, NZRise and NZOSS) was set up and gained wide support. The petition called on the Government to remove the ambiguous "as such" language, and replace it with a simpler clause that clarified the underlying intention. Labour's Clare Curran adopted the petition's proposed alternative clause as an official proposed amendment to the Patents Bill, and other MPs and parties, including United Future MP Peter Dunne, also raised concerns about the lack of clarity in the Bill.
<br /><br />
To its credit, and thanks to the concentrated efforts of many people and not inconsiderable political pressure, the Government decided to take another look at the Bill and has now put forward a new amendment.</blockquote></i>

The <a href="http://www.legislation.govt.nz/sop/government/2013/0237/latest/096be8ed80ae061a.pdf">section dealing with software in the most recent version of the Patents Bill</a> (pdf) still includes the vexed words "as such", but it now tries to clarify what exactly they mean here:

<i><blockquote>Helpfully, it adds two examples into the Bill - one for a software patent application which may be granted, and one which should be declined. Examples in legislation are a good way to demonstrate how a section is intended to be interpreted. The "valid" example is of a washing machine that uses embedded software.... The "invalid" example is of a software process for automating company incorporation. It includes the key comment: "The mere execution of a method within a computer does not allow the method to be patented."
<br /><br />
Importantly, the explanatory note has been enhanced to make the intention of the Bill very clear, including the following comments: "... where the actual contribution of an invention lies solely in it being a computer program, it is ineligible for patent protection... it will not be possible to obtain a patent for an invention that involves or makes use of the computer program if the sole inventive feature is that it is a computer program".</blockquote></i>

Given all the problems with the phrase "as such", it would have been easier to omit it completely, rather than resort to well-meaning but necessarily limited attempts to clarify it through examples.  Burgess offers an interesting explanation of why that didn't happen:

<i><blockquote>It appears that the concern was whether doing so would open New Zealand up for a legal challenge for allegedly not meeting its TRIPS treaty obligations. By aligning the law with wording from another jurisdiction [the EU] that hasn't been challenged, it provided some comfort that New Zealand would be safe.

Whether or not this would have happened is moot now - it was a significant enough concern to the powers that be for the above approach to be adopted.</blockquote></i>

That's certainly a fair point; let's hope it means that the latest wording won't need changing again, and that the updated bill banning software patents finally gets passed.
</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/articles/20130509/09013323019/new-zealand-bans-software-patents-as-such-tries-to-pin-down-what-earth-that-means.shtml">Permalink</a> | <a href="http://www.techdirt.com/articles/20130509/09013323019/new-zealand-bans-software-patents-as-such-tries-to-pin-down-what-earth-that-means.shtml#comments">Comments</a> | <a href="http://www.techdirt.com/articles/20130509/09013323019/new-zealand-bans-software-patents-as-such-tries-to-pin-down-what-earth-that-means.shtml?op=sharethis">Email This Story</a><br />
 ]]></description>
<slash:department>can-we-just-pass-a-law-now?</slash:department>
<wfw:commentRss>http://www.techdirt.com/comment_rss.php?sid=20130509/09013323019</wfw:commentRss>
</item>
<item>
<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>
</item>
<item>
<pubDate>Tue, 7 May 2013 03:32:42 PDT</pubDate>
<title>EU Dings Google's Motorola Mobility Unit For Patent Abuse</title>
<dc:creator>Mike Masnick</dc:creator>
<link>http://www.techdirt.com/articles/20130506/15534222965/eu-dings-googles-motorola-mobility-unit-patent-abuse.shtml</link>
<guid>http://www.techdirt.com/articles/20130506/15534222965/eu-dings-googles-motorola-mobility-unit-patent-abuse.shtml</guid>
<description><![CDATA[ We're still confused as to why Google has continued to have Motorola Mobility play the role of a patent bully ever since they bought it.  Over a year ago, we suggested that Google could make a real statement on patents by <a href="http://www.techdirt.com/articles/20120209/18063117722/if-google-is-serious-about-reforming-patent-mess-it-should-make-bold-statement-stop-using-motorola-patents-to-demand-cash.shtml">stopping</a> its aggressive patent licensing program via Motorola.  After all, Google <a href="http://www.techdirt.com/blog/wireless/articles/20110815/04502915528/google-spends-125-billion-to-buy-motorola-mobility-its-patents.shtml">bought</a> Motorola Mobility just a few weeks after the company appeared to be taking a <a href="http://www.techdirt.com/articles/20110726/03100815255/google-finally-speaking-up-about-problems-with-patent-system.shtml">strong stance</a> against patent bullying.  Ever since, it has seemed rather hypocritical for Motorola Mobility to have kept on being a patent bully.
<br /><br />
And it seems to be backfiring all over the place.  It was the one real area that Google got <a href="http://www.techdirt.com/articles/20130103/10491421570/as-expected-ftc-announces-close-google-investigation-with-no-antitrust-charges-minor-tweaks-to-biz-practices.shtml">in trouble</a> over with the FTC's antitrust investigation.  And, the patent legal fight with Microsoft <a href="http://www.techdirt.com/blog/innovation/articles/20130428/15442222865/googles-attempt-to-bully-microsoft-back-with-patents-not-going-too-well.shtml">hasn't gone well</a> for Motorola Mobility either.  And, now, the latest bit of news is that the <a href="http://www.nytimes.com/2013/05/07/technology/07iht-google07.html" target="_blank">EU is coming down on Motorola Mobility</a> for seeking an injunction over standard-essential patents as well.
<br /><br />
Honestly, this whole thing has left me really confused.  The patent aggression hasn't worked out at all for Google, is leaving them wide open to fines and complaints from various powerful government bodies, isn't doing much in the courts and (most importantly) is leaving the company itself wide open to charges of hypocrisy.  Why not just do the right thing -- the same thing that Google itself has done in the past, and which it has spoken out about on numerous occasions: stop being a patent bully.  It makes no sense that they company has continued down this path.<br /><br /><a href="http://www.techdirt.com/articles/20130506/15534222965/eu-dings-googles-motorola-mobility-unit-patent-abuse.shtml">Permalink</a> | <a href="http://www.techdirt.com/articles/20130506/15534222965/eu-dings-googles-motorola-mobility-unit-patent-abuse.shtml#comments">Comments</a> | <a href="http://www.techdirt.com/articles/20130506/15534222965/eu-dings-googles-motorola-mobility-unit-patent-abuse.shtml?op=sharethis">Email This Story</a><br />
 ]]></description>
<slash:department>still-doesn't-make-any-sense</slash:department>
<wfw:commentRss>http://www.techdirt.com/comment_rss.php?sid=20130506/15534222965</wfw:commentRss>
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<item>
<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>
<wfw:commentRss>http://www.techdirt.com/comment_rss.php?sid=20130505/23161522956</wfw:commentRss>
</item>
<item>
<pubDate>Mon, 6 May 2013 06:00:00 PDT</pubDate>
<title>When Startups Need More Lawyers Than Employees, The Patent System Isn't Working</title>
<dc:creator>Leigh Beadon</dc:creator>
<link>http://www.techdirt.com/articles/20130501/09000922908/when-startups-need-more-lawyers-than-employees.shtml</link>
<guid>http://www.techdirt.com/articles/20130501/09000922908/when-startups-need-more-lawyers-than-employees.shtml</guid>
<description><![CDATA[ <div style="text-align:center;padding:10px;margin:0 0 7px 15px;background:#ebf4fb;float:right;line-height:1.2;">
<i style="font-weight:bold;color:#666;font-size:90%;">Post sponsored by</i>
<br /><br />
<a href="http://devsbuild.it/" rel="nofollow" target="_blank" onclick="_gaq.push(['_trackEvent', 'Sponsored Post: App Developers Alliance', 'Click-thru', 'Sponsor Logo']);"><img src="http://i.imgur.com/83SCTBK.png" width="150" title="Dealbreaker" style="margin:0;" alt="DevsBuild.It, from the Application Developers Alliance"/></a>
</div>
<p>
As part of our sponsorship program with the <a href="http://appdevelopersalliance.org/" onclick="_gaq.push(['_trackEvent', 'Sponsored Post: App Developers Alliance', 'Click-thru', 'In-Post Link']);">Application Developers Alliance</a>, we're highlighting some of the content on <a href="http://devsbuild.it/" target="_blank" onclick="_gaq.push(['_trackEvent', 'Sponsored Post: App Developers Alliance', 'Click-thru', 'In-Post Link']);">DevsBuild.It</a>, their new resource website, that we think will be most interesting to Techdirt readers.
</p>
<p>
We've talked a lot about the tax on innovation that patent trolls create, which is well-known inside startup circles but often misunderstood by the broader public, thanks to the pro-innovation rhetoric of high-profile trolls like Intellectual Ventures. The conversation is getting more attention lately, especially with the recent news of Senator Schumer's <a href="http://www.techdirt.com/blog/innovation/articles/20130430/22152622896/chuck-schumer-to-introduce-patent-reform-bill-to-make-it-cheaper-to-fight-back-against-patent-trolls.shtml">patent reform bill</a> which specifically aims to fight the patent troll problem, and this <a href="http://devsbuild.it/resources/type/interview/developers-patents-five-employees-six-lawyers" rel="nofollow" onclick="_gaq.push(['_trackEvent', 'Sponsored Post: App Developers Alliance', 'Click-thru', 'In-Post Link']);">interview with an anonymous developer from a tech startup</a> offers some perspective from someone who is directly affected by the issue.
</p>
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 ]]></description>
<slash:department>do-the-math</slash:department>
<wfw:commentRss>http://www.techdirt.com/comment_rss.php?sid=20130501/09000922908</wfw:commentRss>
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<item>
<pubDate>Sat, 4 May 2013 09:00:00 PDT</pubDate>
<title>Awesome Stuff: Films About Things Techdirt Talks About</title>
<dc:creator>Mike Masnick</dc:creator>
<link>http://www.techdirt.com/articles/20130503/16375722945/awesome-stuff-films-about-things-techdirt-talks-about.shtml</link>
<guid>http://www.techdirt.com/articles/20130503/16375722945/awesome-stuff-films-about-things-techdirt-talks-about.shtml</guid>
<description><![CDATA[ For this week's <a href="http://www.techdirt.com/blog/?tag=awesome+stuff">awesome stuff</a> post, we've got links to movies about things that we regularly talk about here on Techdirt: the prosecution of Aaron Swartz, the CFAA, patents and piracy.
<ul>
<li>First up, is a documentary about Aaron Swartz called <a href="http://www.kickstarter.com/projects/26788492/aaron-swartz-documentary-the-internets-own-boy-0" target="_blank">The Internet's Own Boy</a> by Brian Knappenberger, who previously did a documentary about Anonymous.  Knappenberger's film isn't a "memorial" about Swartz, but rather an "investigative" documentary about his story and the lawsuit against him, as well as the legal structure that led to his arrest and trial.  The video that Knappenberger has put together is really compelling and touching:
<center>
<iframe frameborder="0" height="360" src="http://www.kickstarter.com/projects/26788492/aaron-swartz-documentary-the-internets-own-boy-0/widget/video.html" width="480"></iframe>
</center>
This project has received a lot of attention, so there's no surprise that it's quite close to its $75,000 target with a few weeks to go.  It looks like it should be a great project to support.
<center>
<iframe frameborder="0" height="380" src="http://www.kickstarter.com/projects/26788492/aaron-swartz-documentary-the-internets-own-boy-0/widget/card.html" width="220"></iframe>
</center>
</li><li> From once CFAA case to another.  Krystof Andres & George Russell are doing a documentary called <a href="http://www.kickstarter.com/projects/2120630809/the-hedgehog-and-the-hare-documentary-project-on-t" target="_blank">The Hedgehog & The Hare</a>, all about the CFAA, but mainly focused on the case against <a href="http://www.techdirt.com/blog/?tag=weev">Andrew "Weev" Auernheimer</a>.  The documentary will also explore how the CFAA goes way too far in trying to criminalize perfectly reasonable computer activities.
<center>
<iframe frameborder="0" height="360" src="http://www.kickstarter.com/projects/2120630809/the-hedgehog-and-the-hare-documentary-project-on-t/widget/video.html" width="480"></iframe>
</center>
The target for this project had much more modest goals than the Swartz one, though the production values definitely look a bit more amateurish.  Plus, frankly, the rewards on the Swartz movie are a lot more reasonable.  That said, with just a few days left, it looks like this movie is likely to squeak by the target even if it's just slightly under as I write this.
<center>
<iframe frameborder="0" height="380" src="http://www.kickstarter.com/projects/2120630809/the-hedgehog-and-the-hare-documentary-project-on-t/widget/card.html" width="220"></iframe>
</center>
</li><li> This next one, I'm a bit less sure about, but the topic could be interesting.  It's supposedly a short film, made in South Africa about the big pharmaceutical makers going after generic drug makers, called <a href="http://www.indiegogo.com/projects/the-cure--10" target="_blank"><i>The Cure</i></a>.  What makes me a bit unsure about is that the filmmakers, Katey Carson and Errol Schwartz, seem a hell of a lot more excited about the fact that (a) they signed up some "Oscar-winning talent" to be in the film and (b) that they're filming the whole thing with an iPhone, than they are about the story, which they barely mention at all.  The topic sounds interesting.  I just wish they'd actually have said something about that, rather than the other stuff which really isn't that interesting.
<center>
<iframe width="480" height="270" src="http://www.youtube.com/embed/vEg8K5qMcvM" frameborder="0" allowfullscreen></iframe>
</center>
The project has barely raised any money, and they're pretty ambitious to seek $35,000 for this.  But since it's an Indiegogo "flex funding" campaign, they'll get the money even if they don't raise the full amount.  Also, the "rewards" you get back seem ridiculously high priced.  You have to pay $100 just to get a download of the short film and $50 for the script?  Hmmm.  Love the idea of a film that highlights problems with drug patents, but not sure this is the best way to do it.
<center>
<iframe src="http://www.indiegogo.com/project/392974/widget/2463980" width="224px" height="486px" frameborder="0" scrolling="no"></iframe>
</center>
</li><li>And, finally, a documentary about piracy.  I mean that's what critics insist this site is all about, right?  So I figured, why not.  Here's a documentary film about a <i>Somali pirate</i> -- you know, one who actually hijacked a ship, called <a href="http://www.indiegogo.com/projects/the-smiling-pirate" target="_blank"><i>The Smiling Pirate</i></a>, which aims to tell the story of the one remaining living member of the pirates who hijacked the Maersk Alabama.  As the story suggests, despite a forthcoming Tom Hanks movie about this whole thing, there appear to be a lot more questions than answers about what really happened both aboard the ship and then with the captured pirate after the whole thing happened.
<center>
<iframe src="http://player.vimeo.com/video/63333093?title=0&portrait=0" width="400" height="300" frameborder="0" webkitAllowFullScreen mozallowfullscreen allowFullScreen></iframe>
</center>
Sounds like an interesting story, but it hasn't picked up very many backers yet.  It's also an Indiegogo flexible funding project, so will receive any money it raises, but it's not clear if it'll get enough to really support the making of the documentary any time soon.
<center>
<iframe src="http://www.indiegogo.com/project/302544/widget/2463980" width="224px" height="486px" frameborder="0" scrolling="no"></iframe>
</center>
</li></ul>
That's it for this week.  Next week we'll be back with more awesome stuff.<br /><br /><a href="http://www.techdirt.com/articles/20130503/16375722945/awesome-stuff-films-about-things-techdirt-talks-about.shtml">Permalink</a> | <a href="http://www.techdirt.com/articles/20130503/16375722945/awesome-stuff-films-about-things-techdirt-talks-about.shtml#comments">Comments</a> | <a href="http://www.techdirt.com/articles/20130503/16375722945/awesome-stuff-films-about-things-techdirt-talks-about.shtml?op=sharethis">Email This Story</a><br />
 ]]></description>
<slash:department>check-it-out</slash:department>
<wfw:commentRss>http://www.techdirt.com/comment_rss.php?sid=20130503/16375722945</wfw:commentRss>
</item>
<item>
<pubDate>Fri, 3 May 2013 15:03:00 PDT</pubDate>
<title>Angry Patent Lawyer Still Angry, Claims PatentlyO's Dennis Crouch Is Both A 'Dickhead' And Violated CFAA</title>
<dc:creator>Mike Masnick</dc:creator>
<link>http://www.techdirt.com/articles/20130503/11582122939/angry-patent-lawyer-still-angry-claims-patentlyos-dennis-crouch-is-both-dickhead-violated-cfaa.shtml</link>
<guid>http://www.techdirt.com/articles/20130503/11582122939/angry-patent-lawyer-still-angry-claims-patentlyos-dennis-crouch-is-both-dickhead-violated-cfaa.shtml</guid>
<description><![CDATA[ Oh boy.  Tim Cushing recently had a post here about a <a href="http://www.techdirt.com/articles/20130426/17431822857/ip-attorney-responds-to-patent-application-rejection-filing-ranting-ad-hom-remarks.shtml">very angry patent lawyer</a>, by the name of Andrew Schroeder.  The story of his unbelievable rant filed with the patent office was originally highlighted <a href="http://www.patentlyo.com/patent/2013/04/dont-write-this-letter-to-the-patent-office.html" target="_blank">over at PatentlyO</a>, by Dennis Crouch, who most folks in the patent business are well aware of because of the blog and his regular commentary on patent-related issues.  After Crouch published the rant, the story caught on in the press and it got a bit of coverage, including on our site as an example of how not to conduct business before the patent office.  Everyone has bad days.  And the best thing to do is to admit that you had a bad day and move on.
<br /><br />
But that's apparently not how Andrew Schroeder rolls.
<br /><br />
Our friends over at Above The Law have <a href="http://abovethelaw.com/2013/05/the-return-of-the-mad-as-hell-patent-attorney-with-pics/" target="_blank">alerted us</a> to the fact that Schroeder is back... and is he ever pissed off about people knowing just how pissed off he is.  In what may be one of the worst-designed blogs ever made (and, warning, it's so badly designed that it doesn't even work at all if you have javascript turned off) Schroeder has announced that first, <a href="http://angelsharkwebsites.com/la-web-designer-blog-multimedia/2013/05/patentlyo-response-to-dennis-crouch-andrew-schroeder/" target="_blank">Dennis Crouch is the "Dickhead of the Year"</a> for 2013 (I'm wondering who the past winners are) and (even better) that he believes <a href="http://angelsharkwebsites.com/la-web-designer-blog-multimedia/2013/05/did-dennis-crouch-commit-a-crime/" target="_blank">Crouch violated the CFAA in finding and publishing his rant</a>.
<br /><br />
Both posts are filled with poorly designed graphics, mostly mocking Crouch, which Schroeder proudly takes credit for late in that first post.  These aren't even "bad in an ironic way" graphics.  They're just bad.  In the way that someone is when they first discover how Photoshop works and suddenly thinks they're a master of design bad.  But the rant is just as wacky.  He never apologizes for the language he uses, beyond noting that it was "less than flattering."  No, his focus is on the claim that his insane rant -- in which he accused a patent examiner of taking drugs, being drunk, not reading the patent application, of having to write with crayons and a variety of other euphemisms to suggest that the examiner has mental problems -- was a "confidential" communication between himself and the examiner, and revealing it involved both (a) illegal hacking into the USPTO site and (b) being a "dickhead" for thinking it might be entertaining to highlight his ranting.
<blockquote><i>
One of the things I find fascinating about this whole ordeal is the fact that many of the articles written since Patentlyo&#8217;s blog post all assume that this was some sort of &#8220;PUBLIC&#8221; rant or tirade.  Everyone assumes that this was some sort of &#8220;Open Letter&#8221; to the USPTO that I wrote to shame this particular Examiner (in fact, this was just between the Examiner, his Senior Examiner and me&#8230;and no one else).  In fact, this was a confidential letter and anyone who tells you anything to the contrary is full of shit, I don&#8217;t give a fuck what they tell you.
</i></blockquote>
Uh, no, it wasn't.
<br /><br />
From there, Schroeder goes into a big rant about how terrible it is to use the USPTO's filing system.  That may be true, but so what?  That has nothing to do with the inappropriate nature of his rant.  Schroeder, however, connects the dots to claim that because the USPTO site is so complicated, he would have thought that it would protect his "confidential" communications better (there's an assumption in there that's not quite true...).  He also includes some totally gratuitous ad hominem attacks on Crouch, because no Schroeder rant is complete without resorting to sophomoric trash talking.
<br /><br />
He further complains that Crouch appears to be "sympathizing with the Examiner!" because no one could possibly sympathize with a patent examiner.  Now, we're generally no big fans of patent examiners around here, because we tend to think they approve all sorts of junk patents, but I think it's rather easy to sympathize with the recipient of Schroeder's rage rant.  Of course, Schroeder hates examiners for the opposite reason we do.  He insists they're not approving nearly enough patents, and that their default is to reject patents.  In fact, he gives an anecdotal "side note" about some mythical patent examiner who has a 100% rejection rate.  That's amusing, since (as we pointed out recently) in 2012, nearly 90% of all patent applications <a href="http://www.techdirt.com/blog/innovation/articles/20130408/08244222623/new-study-uspto-drastically-lowered-its-standards-approving-patents-to-reduce-backlog.shtml">were eventually approved</a>.  And Schroeder thinks examiners are too quick to reject?
<br /><br />
In the second post, Schroeder insists that as far as he can tell it's absolutely impossible that Crouch could have found his rant in the PAIR system, and therefore, he believes that Crouch hacked into the USPTO's computers and violated the CFAA.
<blockquote><i>
I&#8217;m gonna have to crowdsource this one because I&#8217;ve been doing research and can&#8217;t seem to figure out how Dennis Crouch was able to access my account with the USPTO.  It has always been my understanding that patent applications less than 18 months old and their office action responses are to remain confidential.  I&#8217;m starting to think that Patentlyo&#8217;s Dennis Crouch just wants me to believe that it is common knowledge that you can access anyone&#8217;s records there at the USPTO.  However, from my own research I have found no evidence whatsoever that it is possible.  And more importantly, I DON&#8217;T EVEN KNOW IF HIS ACTIONS WERE EVEN LEGAL!
<br /><br />
The more I think about it, the more likely it is that Dennis Crouch may have broken a whole bunch of laws.  When it comes to cyber crimes there are state laws (one for where he lives, possibly where I live, and that of Alexandria, Virginia (USPTO).
<br /><br />
And then of course there are Federal laws as well such as the CFAA (Computer Fraud &#038; Abuse Act) which makes it a felony to hack and steal documents similar to what Dennis mother fucking menace may have done.
</i></blockquote>
That one comes complete with a poorly executed graphic showing Crouch's head mixed in with the text "Computer Hacking is Cool" and pretending that this is a class that Crouch teaches at the University of Missouri Law School.
<br /><br />
Randomly, at the end of the first blog post, Schroeder goes off on how proud he is of the hard work he puts into designing his websites:
<blockquote><i>
You see, for the past several years I have taught myself how to build my own websites, everything&#8230;from A-Z.  I can do HTML, the Videos, the graphics, the images, CSS, and even the SEO.  And I think that I can build one hell of a website.  For the past several years, I have had countless people call me out of the blue and ask me who built my website.  When I reveal to them that it was me, they usually respond with something like, &#8220;No, really, who actually built your website?&#8221;
<br /><br />
I love building websites.  I get absorbed in it, and I can&#8217;t tell you how many times I have looked up at the clock to see &#8220;3:AM&#8221;, and wonder where the past 12 hours went.  Some guys have video games, girls have shoe hunting expeditions, I have the website munchies.  So, if any of you have gotten this far and think you need a website, go ahead and give me a call, and I&#8217;ll hook you up!
</i></blockquote>
The website has to be seen to be believed.  Not only does it not function without javascript, but the layout is ridiculous and confusing, the graphics don't line up, and (as mentioned) the graphic design is awful.  So, not only can you get a patent lawyer who might start cursing you out and rant at you for not approving the patent he wanted you to approve, but he might start advertising his awful web design skills in the middle of it all.  Wow.  Here's a screenshot of one of the blog posts (each has their own "background" image that distracts from, well, everything.
<center>
<a href="http://imgur.com/CVDoRG0"><img src="http://i.imgur.com/CVDoRG0.png" width=560 /></a>
</center>
Schroeder might do well to consider taking a deep breath before writing any more angry rants and maybe, just maybe, taking a class on web an graphic design.<br /><br /><a href="http://www.techdirt.com/articles/20130503/11582122939/angry-patent-lawyer-still-angry-claims-patentlyos-dennis-crouch-is-both-dickhead-violated-cfaa.shtml">Permalink</a> | <a href="http://www.techdirt.com/articles/20130503/11582122939/angry-patent-lawyer-still-angry-claims-patentlyos-dennis-crouch-is-both-dickhead-violated-cfaa.shtml#comments">Comments</a> | <a href="http://www.techdirt.com/articles/20130503/11582122939/angry-patent-lawyer-still-angry-claims-patentlyos-dennis-crouch-is-both-dickhead-violated-cfaa.shtml?op=sharethis">Email This Story</a><br />
 ]]></description>
<slash:department>andrew-schroeder,-have-you-met-charles-carreon?</slash:department>
<wfw:commentRss>http://www.techdirt.com/comment_rss.php?sid=20130503/11582122939</wfw:commentRss>
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<item>
<pubDate>Thu, 2 May 2013 20:19:00 PDT</pubDate>
<title>Our Patent System Incentivizes Drug Companies To Pay Doctors Kickbacks</title>
<dc:creator>Mike Masnick</dc:creator>
<link>http://www.techdirt.com/articles/20130502/11040822920/our-patent-system-incentivizes-drug-companies-to-pay-doctors-kickbacks.shtml</link>
<guid>http://www.techdirt.com/articles/20130502/11040822920/our-patent-system-incentivizes-drug-companies-to-pay-doctors-kickbacks.shtml</guid>
<description><![CDATA[ You may have seen the news recently that the US government has kicked off <a href="http://www.reuters.com/article/2013/04/26/us-novartis-fraud-lawsuit-idUSBRE93P16120130426" target="_blank">a lawsuit against Novartis</a>, the pharmaceutical giant, for paying kickbacks to doctors to get them to prescribe certain drugs.
<blockquote><i>
Authorities said the Basel-based company for a decade lavished healthy speaking fees and "opulent" meals, including a nearly $10,000 dinner for three at the Japanese restaurant, Nobu, to induce doctors to prescribe its drugs.
<br /><br />
They said this led to the Medicare and Medicaid programs paying millions of dollars in reimbursements based on kickback-tainted claims for medication such as hypertension drugs Lotrel and Valturna and the diabetes drug Starlix.
<br /><br />
The charges are detailed in a whistleblower lawsuit first filed against Novartis Pharmaceuticals Corp by a former sales representative in January 2011 and which the U.S. government has now joined.
</i></blockquote>
Of course, this is hardly a surprise to anyone who has followed the medical profession at all over the past few decades.  The stories of "favors" and benefits for doctors from mis-named pharmaceutical "sales reps" (often very young, just out of school, incredibly attractive, but with little knowledge of the actual field), whose jobs often seemed more akin to cruise director and entertainer rather than knowledgeable, helpful sales person, are everywhere.  That it's finally taken this long for the government to think that maybe, just maybe, this might distort the nature of our healthcare system, and lead to wasteful prescriptions, including prescriptions that cost significant taxpayer money is somewhat incredible.
<br /><br />
What's worse, as economist Dean Baker <a href="https://twitter.com/DeanBaker13/status/328273470901321728" target="_blank">points out</a>, is that anyone at all is surprised that this happens.  After all, when our own government policy is to hand those drugmakers incredibly powerful monopolies on life-saving pharmaceuticals, we've actually <a href="http://www.cepr.net/index.php/blogs/beat-the-press/government-granted-patent-monopolies-lead-to-corruption-42347" target="_blank">created the incentives ourselves</a> for such activity to take place:
<blockquote><i>
When the government grants drug companies patent monopolies that allow them to sell drugs at hundreds or even thousands of times the free market price it gives them an enormous incentive to do things like<a href="http://www.reuters.com/article/2013/04/26/us-novartis-fraud-lawsuit-idUSBRE93P16120130426"> pay off doctors to prescribe drugs</a>. Everyone who has ever taken an intro economics class understands that fact.
<br /><br />
Unfortunately our leading economists do not seem aware of how protectionism in the prescription drug industry leads to corruption that can both raise costs and jeopardize the public's health.
</i></blockquote>
Perhaps that's why it took the US government so long to even attempt to crack down on such activities.  It created the environment in which such activities thrive and are encouraged.
<br /><br />
If we want to stop such practices, perhaps, rather than just suing the pharmaceutical companies, we start to look at the ridiculous incentive structure we've set up, whereby drug companies take on very little of the actual risk (most drugs today are actually first created by universities using publicly funded money), but are given incredibly powerful monopolies, such that the prices are considered unbelievable.
<br /><br />
True competition in the market would -- as always -- lead to both more actual innovation, lower prices, less corruption and (most importantly) better health and public safety.<br /><br /><a href="http://www.techdirt.com/articles/20130502/11040822920/our-patent-system-incentivizes-drug-companies-to-pay-doctors-kickbacks.shtml">Permalink</a> | <a href="http://www.techdirt.com/articles/20130502/11040822920/our-patent-system-incentivizes-drug-companies-to-pay-doctors-kickbacks.shtml#comments">Comments</a> | <a href="http://www.techdirt.com/articles/20130502/11040822920/our-patent-system-incentivizes-drug-companies-to-pay-doctors-kickbacks.shtml?op=sharethis">Email This Story</a><br />
 ]]></description>
<slash:department>the-system-is-broken</slash:department>
<wfw:commentRss>http://www.techdirt.com/comment_rss.php?sid=20130502/11040822920</wfw:commentRss>
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<pubDate>Mon, 29 Apr 2013 07:09:00 PDT</pubDate>
<title>Google's Attempt To Bully Microsoft Back With Patents Not Going Too Well</title>
<dc:creator>Mike Masnick</dc:creator>
<link>http://www.techdirt.com/blog/innovation/articles/20130428/15442222865/googles-attempt-to-bully-microsoft-back-with-patents-not-going-too-well.shtml</link>
<guid>http://www.techdirt.com/blog/innovation/articles/20130428/15442222865/googles-attempt-to-bully-microsoft-back-with-patents-not-going-too-well.shtml</guid>
<description><![CDATA[ Ever since Google decided to stick with Motorola Mobility's existing patent fights with various companies, I've been wondering why they did so.  Here was a chance for Google to take the high road and actually live up to what it had been claiming concerning the problems of patents.  But, instead, it's basically continued to try to use patents as a weapon.  The fight against Microsoft has been particularly silly.  While Microsoft did <a href="http://www.techdirt.com/blog/wireless/articles/20101001/13562611251/microsoft-sues-motorola-for-patent-infringement-over-android.shtml">initiate</a> things, Motorola's decision to <a href="http://www.techdirt.com/articles/20101111/08052911817/microsoft-and-motorola-go-all-in-with-patent-nuclear-war.shtml">fight back</a> had seemed dubious from the start.  Being a patent bully is no way to run a long-term business, and that's doubly true when you're a company telling people how broken the patent system really is.
<br /><br />
And yet, Motorola Mobility pushed on against Microsoft... and it's not going well.  On Friday, a judge <a href="http://allthingsd.com/20130425/court-denies-motorola-the-billions-it-wanted-from-microsoft-for-standard-essential-patents/?refcat=news" target="_blank">knocked the damages down to next to nothing</a>, basically siding with Microsoft.  Microsoft had argued that if there were any infringement, the amount owed should be about $1.2 million.  Motorola Mobility had argued for... <i>$4 billion</i>.  The judge came down at just $1.8 million.
<br /><br />
I recognize, of course, that the whole reason that Google bought Motorola Mobility was to get access to these patents.  And, on top of that, Microsoft did strike first here.  However, Motorola Mobility had hit back quite strongly, and even once Google was in control, it seemed to have little interest in pulling back.  The whole thing makes Google look a bit hypocritical, and it certainly hasn't helped the company win any of these legal battles.<br /><br /><a href="http://www.techdirt.com/blog/innovation/articles/20130428/15442222865/googles-attempt-to-bully-microsoft-back-with-patents-not-going-too-well.shtml">Permalink</a> | <a href="http://www.techdirt.com/blog/innovation/articles/20130428/15442222865/googles-attempt-to-bully-microsoft-back-with-patents-not-going-too-well.shtml#comments">Comments</a> | <a href="http://www.techdirt.com/blog/innovation/articles/20130428/15442222865/googles-attempt-to-bully-microsoft-back-with-patents-not-going-too-well.shtml?op=sharethis">Email This Story</a><br />
 ]]></description>
<slash:department>live-by-the-sword...</slash:department>
<wfw:commentRss>http://www.techdirt.com/comment_rss.php?sid=20130428/15442222865</wfw:commentRss>
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<pubDate>Fri, 19 Apr 2013 15:25:24 PDT</pubDate>
<title>New Tool Lets You See How Often A Patent Has Shown Up In Litigation</title>
<dc:creator>Mike Masnick</dc:creator>
<link>http://www.techdirt.com/articles/20130419/02262422761/new-tool-lets-you-see-how-often-patent-has-shown-up-litigation.shtml</link>
<guid>http://www.techdirt.com/articles/20130419/02262422761/new-tool-lets-you-see-how-often-patent-has-shown-up-litigation.shtml</guid>
<description><![CDATA[ A few years back, a patent attorney made a simple suggestion to me, asking that, whenever I write about patent lawsuits, that I include the US patent number on the patent within the text of the article.  He explained that for those sued, one of the most useful things is to find other lawsuits regarding that patent, and it's actually not that easy, so having stories list the patent numbers becomes a big deal.  In many cases, when companies are sued, their lawyer does a general search to see if the patent has been used in litigation before -- and it's that general Google Search, which is why the request was made to me to include patent numbers.  However, for companies or individuals sued by patent holders, having a lawyer sit there and do a Google search can cost you an extra $500 to $700 per hour of lawyers' fees.  Many lawyers have argued that the system needs to be much better.
<br /><br />
Thankfully, the folks over at Patexia have recently launched a new feature on their site that makes it much easier to look up such things.  For example, <a href="http://www.patexia.com/us-patents/06857067/summary/highlight/6857067" target="_blank">here are the Patexia results for lawsuits</a> involving <a href="http://www.google.com/patents/US6857067?printsec=abstract#v=onepage&#038;q&#038;f=false" target="_blank">US Patent 6,857,067</a> which is held by Uniloc, who recently used it to <a href="http://www.techdirt.com/articles/20120923/23002120494/x-plane-developer-sued-patent-troll-ponders-shuttering-business-defending.shtml">sue X-Plane</a>, <a href="http://www.techdirt.com/articles/20120722/09172319787/uniloc-such-rush-to-sue-minecraft-patent-infringement-it-didnt-even-spell-name-right.shtml">Mojang</a> and others.  While, in that case, you can see all the recent lawsuits come from Uniloc (who could be searched via Pacer), it may not be as complex.  But when patents get passed around a lot, following the trail isn't always so easy.  No matter what, this seems like it could be a useful tool, especially for those sued by patent trolls.<br /><br /><a href="http://www.techdirt.com/articles/20130419/02262422761/new-tool-lets-you-see-how-often-patent-has-shown-up-litigation.shtml">Permalink</a> | <a href="http://www.techdirt.com/articles/20130419/02262422761/new-tool-lets-you-see-how-often-patent-has-shown-up-litigation.shtml#comments">Comments</a> | <a href="http://www.techdirt.com/articles/20130419/02262422761/new-tool-lets-you-see-how-often-patent-has-shown-up-litigation.shtml?op=sharethis">Email This Story</a><br />
 ]]></description>
<slash:department>quite-useful</slash:department>
<wfw:commentRss>http://www.techdirt.com/comment_rss.php?sid=20130419/02262422761</wfw:commentRss>
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<pubDate>Thu, 18 Apr 2013 00:15:08 PDT</pubDate>
<title>Cambodian Activists Explain Why The EU-India FTA Is A Matter Of Life And Death</title>
<dc:creator>Glyn Moody</dc:creator>
<link>http://www.techdirt.com/articles/20130412/02574622687/cambodian-activists-explain-why-eu-india-fta-is-matter-life-death.shtml</link>
<guid>http://www.techdirt.com/articles/20130412/02574622687/cambodian-activists-explain-why-eu-india-fta-is-matter-life-death.shtml</guid>
<description><![CDATA[ <p>
One of the many problems with the secretive nature of trade agreements is that it insulates negotiators from the real-world consequences of their actions.  That's particularly true for the FTA talks between the <a href="https://www.techdirt.com/articles/20120808/10592619965/indias-acta-intellectual-property-rights-secrecy-stall-treaty.shtml">EU and India</a>, currently taking place behind closed doors. One of the key issues for the EU side is India's role as a supplier of generic medicines to the world, and India's tough stance on issues like the <a href="https://www.techdirt.com/articles/20130401/09233022536/indian-supreme-court-rejects-evergreening-pharma-patents.shtml">evergreening</a> of pharma patents.  From the various leaks that we have, it seems that the EU is demanding that India toe the line on drug patents, and cut back its supply of low-cost generics to emerging countries.
</p>
<p>
That might seem a reasonable request, since there is no doubt that India's production of generics reduces the profits of the pharma companies in Europe, which could charge far higher prices were there no competition from generics.  But what that overlooks -- and what secret negotiations allow those involved to overlook -- is the impact such a move would have on millions of people around the world.
</p>
<p>
A letter from a group of Cambodian activists that struggle to supply much-needed medicines to those too poor to buy them, published on the infojustice.org site, provides us with <a href="http://infojustice.org/archives/29266">a rare insight into what the EU's demands would mean for the world's poor</a>:

<i><blockquote>We are saddened that behind the rhetoric of democracy, human rights and freedom the EU is in fact prioritising corporate interests to the lives of millions of people. It is needless to say that those affordable generic drugs are absolutely vital for the lives of millions who otherwise cannot afford expensive treatment of life threatening diseases such as tuberculosis, malaria and HIV-AIDS. Many suffering from such serious diseases would not be able to survive without these generic drugs produced in India.
<br /><br />
&#8230;
<br /><br />
Having seen the importance of made-in-India generic drugs for the lives of millions, we in no ways can express our frustration about the attempt of EU and European pharmaceutical giants to control the production of these cheap medicines. This must stop right now. It is a true example of putting profits before people's lives and take advantage of people's illness for corporate profits. Our lives should not be regarded as a business opportunity. We urge the EU to reconsider its pursuit of intellectual property rights for medicines and to realise that blindly protecting the interests of large European pharmaceutical corporations will lead to nothing but a subtle form of genocide of the poor, their families and children in developing countries across the world.</blockquote></i>

It's hard to believe the EU negotiators personally wish to kill thousands of the poor; but the secretive nature of the talks means that they can close their eyes to the fact that if they succeed in forcing India to cut back its production of generics, large numbers of people will certainly die as a direct result.  That's another reason why these kind of talks must be held openly: not just so that we know what is happening and can give our input, but also so that those conducting the talks realize that what they are doing is not some abstract game, but a matter of life and death for millions around the world.
</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/articles/20130412/02574622687/cambodian-activists-explain-why-eu-india-fta-is-matter-life-death.shtml">Permalink</a> | <a href="http://www.techdirt.com/articles/20130412/02574622687/cambodian-activists-explain-why-eu-india-fta-is-matter-life-death.shtml#comments">Comments</a> | <a href="http://www.techdirt.com/articles/20130412/02574622687/cambodian-activists-explain-why-eu-india-fta-is-matter-life-death.shtml?op=sharethis">Email This Story</a><br />
 ]]></description>
<slash:department>transparency-is-two-way-street</slash:department>
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<pubDate>Tue, 16 Apr 2013 04:06:11 PDT</pubDate>
<title>Supreme Court Seems Skeptical As Myriad Claims Gene Patents Should Exist, Because It Put A Lot Of Work Into Finding Them</title>
<dc:creator>Mike Masnick</dc:creator>
<link>http://www.techdirt.com/articles/20130415/16444322713/supreme-court-seems-skeptical-as-myriad-claims-gene-patents-should-exist-because-it-put-lot-work-into-finding-them.shtml</link>
<guid>http://www.techdirt.com/articles/20130415/16444322713/supreme-court-seems-skeptical-as-myriad-claims-gene-patents-should-exist-because-it-put-lot-work-into-finding-them.shtml</guid>
<description><![CDATA[ As many people know, on Monday, the Supreme Court <a href="http://www.techdirt.com/articles/20121130/14214321189/supreme-court-will-finally-say-if-genes-are-patentable.shtml">finally</a> heard the <a href="http://www.techdirt.com/blog/?company=myriad+genetics">Myriad Genetics</a> case, to look at whether or not genes are patentable subject matter.  For the past few decades, the USPTO has generally argued that you can patent genes, which just seems crazy to most folks who point out that it's nuts to patent something that exists in your body.  Supporters argue that they're trying to patent <i>the process</i> of isolating the gene, but that's just semantics.  As you may recall, the appeals court, CAFC, had decided that genes <a href="http://www.techdirt.com/articles/20110729/16573515324/appeals-court-says-genes-are-patentable-because-theyre-separate-your-dna.shtml">are patentable</a> because they're separate from your DNA.  After that, the Supreme Court <a href="http://www.techdirt.com/articles/20120320/17195118175/huge-ruling-court-rejects-medical-diagnostic-patent.shtml">disallowed</a> patents on medical diagnostics, and asked CAFC to reconsider the Myriad case with that as a guide.  In response, CAFC <a href="http://www.techdirt.com/articles/20120816/09511120075/appeals-court-doubles-down-genes-still-patentable.shtml">stuck by</a> its guns, insisting that genes are patentable.
<br /><br />
With the big caveat that oral hearings are often <i>meaningless</i> in terms of how the Supreme Court eventually rules, the <a href="http://www.supremecourt.gov/oral_arguments/argument_transcripts/12-398-amc7.pdf" target="_blank">transcript</a> and the <a href="http://www.scotusblog.com/2013/04/argument-recap-analogies-to-the-rescue/" target="_blank">various reports</a> from those who were there suggest that there is at least some good skepticism about patenting genes.  First off, we should point out that Myriad's CEO, Peter Meldrum posted a ridiculous op-ed at USA Today over the weekend, in which he argued that Myriad should be allowed to get patents <a href="http://www.usatoday.com/story/opinion/2013/04/14/myriad-genetics-supreme-court-editorials-debates/2082553/" target="_blank">because it worked hard to get them</a>.
<blockquote><i>
To create tests for hereditary breast cancer and ovarian cancer, our company and its investors spent more than $500 million over 17 years before we were able to recoup this investment.
</i></blockquote>
Except, of course, patents aren't about the sweat of your brow and how much work you put into something.  Nor -- despite Meldrum's silly claims -- are they about letting companies "own" their findings:
<blockquote><i>
We think it is right for a company to be able to own its findings, just as pharmaceutical and other companies do all the time.
</i></blockquote>
Except, of course, that's wrong.  Because Meldrum <b>does not</b> want any <i>other</i> companies, who came up with the same thing independently, to "own" their "findings."  Instead, he wants them to pay up or go out of business.  For all of those companies, who may have spent even more money, that, apparently, doesn't matter at all, which highlights the complete hypocrisy of Meldrum's position.  His argument only applies to his company, and not any other.
<br /><br />
Furthermore, Myriad's critics made clear to point out that other labs were working on the same thing and were happily foregoing patent protection.  The clear suggestion: it wasn't the patent that created the incentive, and the end result was that <i>all of those other businesses were harmed</i>.  So Myriad's argument that it's helping researchers is doubtful.
<blockquote><i>
We know that there were other labs looking for the BRCA genes and they had announced that they would not patent them if they were the first to find it. We also know that prior to the patent actually being issued, there were other labs doing BRCA testing and Myriad shut all that testing down. So we know in this particular case that problem would not have arisen.
<br /><br />
But the point of the whole -- the whole point of the product of nature doctrine is that when you lock up a product of nature, it prevents industry from innovating and -- and making new discoveries. That's the reason we have the product of nature doctrine, is because there may be a million things you can do with the BRCA gene, but nobody but Myriad is allowed to look at it and that is impeding science rather than advancing it.
</i></blockquote>
Justice Scalia followed that up by asking why would anyone invent anything if they can't get a patent.  Of course, he might want to ask all of those labs that invested in the same process, but can't do anything about it.  It seems they lose out, too.
<br /><br />
In the end, there was clear skepticism from the Justices, but also a suggestion that they might try to punt the issue (again!) by ruling narrowly on particular issues, rather than by taking on the big question.  We'll see how it all comes out in a few months...<br /><br /><a href="http://www.techdirt.com/articles/20130415/16444322713/supreme-court-seems-skeptical-as-myriad-claims-gene-patents-should-exist-because-it-put-lot-work-into-finding-them.shtml">Permalink</a> | <a href="http://www.techdirt.com/articles/20130415/16444322713/supreme-court-seems-skeptical-as-myriad-claims-gene-patents-should-exist-because-it-put-lot-work-into-finding-them.shtml#comments">Comments</a> | <a href="http://www.techdirt.com/articles/20130415/16444322713/supreme-court-seems-skeptical-as-myriad-claims-gene-patents-should-exist-because-it-put-lot-work-into-finding-them.shtml?op=sharethis">Email This Story</a><br />
 ]]></description>
<slash:department>sweat-of-the-brow</slash:department>
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<pubDate>Mon, 15 Apr 2013 03:52:24 PDT</pubDate>
<title>How Big Agribusiness Is Heading Off The Threat From Seed Generics -- And Failing To Keep The Patent Bargain</title>
<dc:creator>Glyn Moody</dc:creator>
<link>http://www.techdirt.com/articles/20130405/09003022593/how-big-agribusiness-is-heading-off-threat-generics-failing-to-keep-patent-bargain.shtml</link>
<guid>http://www.techdirt.com/articles/20130405/09003022593/how-big-agribusiness-is-heading-off-threat-generics-failing-to-keep-patent-bargain.shtml</guid>
<description><![CDATA[ Recently we wrote about how pharmaceutical companies use "<a href="https://www.techdirt.com/articles/20130401/09233022536/indian-supreme-court-rejects-evergreening-pharma-patents.shtml">evergreening</a>" to extend their control over drugs as the patents expire.  But this is also an issue for the world of agribusiness: a number of key patents, particularly for traits of genetically-engineered (GE) organisms, will be entering the public domain soon, and leading companies like Bayer, BASF, Dow, DuPont, Monsanto and Syngenta are naturally coming up with their own "evergreening" methods.
<p>
A new report from the <a href="http://www.etcgroup.org/about">ETC Group</a>, which describes itself as working "to address the socioeconomic and ecological issues surrounding new technologies that could have an impact on the world's poorest and most vulnerable people", offers an interesting view of <a href="http://www.etcgroup.org/sites/www.etcgroup.org/files/ETCCommCharityCartel_March2013_final.pdf">how the big agribusiness companies are trying to do that</a> (pdf).
</p>
<p>
Making its position quite clear, ETC calls the approach "philanthrogopoly" -- a "charity" cartel that is designed to assuage fears that they represent an anticompetitive oligopoly, while simultaneously ensuring that real control remains with the agribusiness companies even after key patents have expired:

<i><blockquote>The Gene Giants know their market dominance looks conspicuously like an anticompetitive oligopoly, so they&#8217;re launching a series of initiatives -- including the false promise of cheap, post-patent GE seeds -- to mollify antitrust regulators and soften opposition to transgenics while advancing their collective market control.</blockquote></i>

Here's the problem that "philanthrogopoly" claims to address:

<i><blockquote>The looming crisis, according to the Gene Giants, is that when patents on biotech traits expire, the breeders who want to use these generic traits must have biosafety approval from the government authorities where they plan to export the GE commodity or cultivate the GE seeds. If biosafety authorizations are not kept up-to-date -- even for tiny traces of expired traits -- entire barges of transgenic beans, containers of biotech cotton or maize risk being rejected in Rotterdam, Dalian, or Yokohama. For US and other farmers who depend on exports of GE commodity crops, the presence of unauthorized generic traits could be devastating, according to industry. For example, one quarter of all US soybeans are
 exported to China, and 95% of those beans are genetically engineered. An estimated 93% of GE soybeans in the United States contain a Monsanto trait that goes off-patent in 2014.
<br /><br />
The complexity, however, is not just the biosafety review process; it's also the fact that re-registration requires legal access to the proprietary safety testing data initially submitted by one of the Gene Giants to government regulators. (For the Gene Giants, safety data are considered "confidential business information" and a protected trade secret -- it's not something they're accustomed to sharing, especially with competitors.) Without access to the proprietary information, the cost of bringing generic biotech crops to market would be prohibitive.</blockquote></i>

So what do the top players here propose in order to address this issue?  They have come up with what they call, rather dramatically, "<a href="http://www.agaccord.org/">the Accord</a>", which includes an option for patent holders to continue to oversee biosafety approval for their GE seeds, either alone, or working with other companies.  As ETC points out, this is likely to lead to even closer cooperation among the leading agribusiness giants, which already have extensive cross-licensing agreements with each other.
</p>
<p>
One thing that the Accord will <b>not</b> lead to is a flood of low-cost seeds produced by generics companies, as has already happened in the world of pharma, with huge knock-on benefits for the world's poor.  For that to happen, the key safety testing data held by the agribusiness giants would need to be available.  And despite the reasonableness of requiring companies to do that -- after all, if they want people to eat their products, they should be prepared to release the scientific evidence it is safe to do so -- that's not likely to happen unless they are forced to by governments.
</p>
<p>
Another factor making it extremely unlikely that we will see many seed generics is the dense web of patents that now envelope GE varieties, as ETC explains:

<i><blockquote>In the words of Randy Schlatter, DuPont Pioneer's senior manager of intellectual property: "What growers may not realize is that even though the trait patent expires, there are a host of other intellectual property patents on those varieties that are just as strong." In an interview with DTN/Progressive Farmer, Schlatter observed: "If there is a [first generation genetically engineered] soybean in the market today that is truly generic and not protected by a patent of some sort, I've not been able to find it." DuPont Pioneer, the world's second biggest seed company, has more than 225 patents covering its portfolio of soybean seeds -- not just on transgenic traits -- but on breeding technologies, germplasm and conventional ("native") traits. Even if a single transgenic trait goes off patent, the maize or soybean variety that contains the trait is likely the subject of a complex web of intellectual property. The two dozen patents on biotech seed traits that will expire over the next decade are dwarfed by the thousands of existing patents on traits, seeds and varieties</blockquote></i>

This is similar to some of the approaches to evergreening in the pharma industry -- adding extra, patented features to older technologies as the latter enter the public domain.  The net result is the same for both drugs and crops: the patent "bargain" with society, that a time-limited, government-backed monopoly is granted in return for allowing anyone to use the invention freely at the end of the patent term, is not being kept fully.  Once more, the public is shortchanged.
</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/articles/20130405/09003022593/how-big-agribusiness-is-heading-off-threat-generics-failing-to-keep-patent-bargain.shtml">Permalink</a> | <a href="http://www.techdirt.com/articles/20130405/09003022593/how-big-agribusiness-is-heading-off-threat-generics-failing-to-keep-patent-bargain.shtml#comments">Comments</a> | <a href="http://www.techdirt.com/articles/20130405/09003022593/how-big-agribusiness-is-heading-off-threat-generics-failing-to-keep-patent-bargain.shtml?op=sharethis">Email This Story</a><br />
 ]]></description>
<slash:department>bad-taste-in-the-mouth</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>
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<pubDate>Fri, 12 Apr 2013 09:45:00 PDT</pubDate>
<title>Rackspace Sues Famed Patent Troll For Breach Of Contract</title>
<dc:creator>Mike Masnick</dc:creator>
<link>http://www.techdirt.com/articles/20130406/22502722617/rackspace-sues-famed-patent-troll-breach-contract.shtml</link>
<guid>http://www.techdirt.com/articles/20130406/22502722617/rackspace-sues-famed-patent-troll-breach-contract.shtml</guid>
<description><![CDATA[ Well, well.  Rackspace, who has been successfully <a href="http://www.techdirt.com/articles/20130328/15373322500/even-east-texas-court-has-told-uniloc-that-it-cant-patent-math.shtml">fighting back</a> against a bunch of patent trolls lately, is fighting back again, and this time they're <a href="http://www.rackspace.com/blog/why-rackspace-sued-the-most-notorious-patent-troll-in-america/" target="_blank">taking on one of the more notorious patent trolls out there</a>: Erich Spangenberg.  Rackspace explains a bunch of the details on their site, though it helps to know a bit of the background.  While some of the reporting out there <a href="http://www.v3.co.uk/v3-uk/news/2259517/rackspace-hits-out-at-patent-troll-parallel-iron-in-hadoop-spat" target="_blank">suggests</a> that Rackspace's reference to "the most notorious patent troll" is about the company Parallel Iron, it's really Spangenberg who is the target.
<br /><br />
First, some background.  Spangenberg has built up quite a business for himself by buying up awful patents and suing tons of companies, often getting them to pay up.  He's claimed in the past that he likes to <a href="http://www.techdirt.com/articles/20100528/1320179621.shtml">sue first</a> and ask questions later.  He famously got in trouble a few years back for shuffling some of his patents around and <a href="http://www.techdirt.com/articles/20080603/0142061298.shtml">suing</a> Daimler Chrysler <i>twice</i> over the same patent even though the company had <i>settled</i> the original lawsuit and licensed the patent.  That didn't go well for Spangenberg, as he was told to <a href="http://www.techdirt.com/articles/20080620/0544071462.shtml">pay $4 million</a>.  Remember that story, because it seems like Spangenberg's apparent sloppiness in actually living up to the terms of deals he signs may be part of why he's likely to be on the hook against Rackspace.
<br /><br />
The other time we wrote about one of Spangenberg's schemes failing massively was when he used one of his <i>many</i> shell companies, IP Nav, to demand a license from Renaissance Learning.  Except that IP Nav wasn't the patent holder, but claimed to be "representing" the patent holder, and then it <i>refused to tell Renaissance how they were infringing or even what the patent was</i> <b>unless</b> the company agreed to sign a total gag order, such that they couldn't talk at all about whatever came from the discussions.  Renaissance, smartly, went to court instead, issued a subpoena demanding Spangenberg identify the patent and the patent holder, and then sought declaratory judgment that it did not infringe.  The court sided -- strongly -- with Renaissance, and smacked Spangenberg down a bit for his actions.
<blockquote><i>
Some might look at the silky wording of IP Nav's letter to Renaissance and see a close question; this court, however, sees an unmistakable and intentional warning shot across the bow. The actual message is pellucid to any patent litigator, so that IP Nav's use of apophasis is disingenuous and unavailing. Remember Mark Antony's funeral oration in Julius Caesar? That's how an experienced business executive or lawyer would view IP Nav's assertions that "we are focused on addressing these issues without the need for costly and protracted litigation" and "our client's preferred approach is to conclude licensing discussions without resorting to litigation. We hope you share this objective." The implied "or else!" oozes from this letter like lye from lutefisk. To paraphrase an observation attributed to Anton Chekhov, you don't hang a gun over the mantle in Act I unless someone is going to fire it in Act III. 
</i></blockquote>
Not surprisingly, this wasn't the only time that IP Nav and Spangenberg tried these kinds of tactics.  Rackspace recounts a similar approach from IP Nav:
<blockquote><i>
Our dealings with this particular troll reach back to December 2010 when IP Navigation Group (IP Nav), as agent for a supposedly secret patent owner, now known as Parallel Iron, accused Rackspace of patent infringement. IP Nav told us that they could not divulge the details of their infringement claims &#8211; not even the patent numbers or the patent owner &#8211; unless we entered into a &#8220;forbearance agreement&#8221; &#8211; basically, an agreement that we would not sue them. IP Nav was worried that as soon as we found out what their patents and claims actually were, Rackspace would sue to invalidate their patents or for a declaration that Rackspace does not infringe.
</i></blockquote>
Rackspace pushed back against this, and instead "negotiated a mutual forbearance agreement that required either party to give 30 days&#8217; notice before bringing suit."
<br /><br />
Since then, Parallel Iron has become a popular name in patent trolling circles, suing <a href="http://www.techdirt.com/blog/innovation/articles/20120714/03315519701/patent-troll-sues-facebook-amazon-oracle-linkedin-citigroup-morgan-stanley-more-using-certain-file-systems.shtml">a ton of companies</a> for their choice of <i>file systems</i>.  They basically claim that the super popular Hadoop file system violates their patents, which seems incredibly dubious.  Parallel Iron has already shifted around what patents it's suing over, as earlier cases got dismissed due to <i>another</i> mistake by Parallel Iron.  As Rackspace's lawsuit explains:
<blockquote><i>
Unfortunately, the lawsuits filed on the &#8216;565 patent were just part of
the pattern of misconduct by Parallel Iron and IPNav. Parallel Iron-Texas did not
have standing to sue because the &#8216;565 patent was not enforceable by Parallel Iron-
Texas. The &#8216;565 patent was subject to a terminal disclaimer, requiring that the &#8216;565
patent be commonly owned with an earlier patent. Unaware that Parallel Iron-
Texas had no right to enforce the &#8216;565 patent, many of Parallel Iron-Texas&#8217;s targets
settled out to avoid the high cost of litigation. But when one of the targets
discovered the lawsuit&#8217;s fatal defect, Parallel Iron-Texas immediately dismissed all
but one of the remaining defendants (the last defendant, EMC, was not dismissed
until July 2012).
</i></blockquote>
However, the new version of Parallel Iron has filed nearly two dozen new lawsuits over the past few months making similar claims using other patents, and finally got around to suing Rackspace in one of these rounds.  But, apparently someone forgot about that agreement that Rackspace had signed with IP Nav a couple years ago, and did not give Rackspace the 30 days notice.  So, not only is Rackspace seeking declaratory judgment that it does not infringe, but it's also going after IP Nav for breach of contract.
<blockquote><i>
Each party agreed &#8220;that it [would] not bring litigation against the
other Party from the date of execution of [the Forbearance Agreement] until 30 days
after either Party provides written notice to the other Party that discussions
between the Parties have ended.&#8221; Parallel Iron provided no such notice, yet sued
Rackspace in Delaware. Thus, it breached essentially the only covenant of the
contract.
<br /><br />
Parallel Iron&#8217;s premature lawsuit amounts to a material breach of the
Forbearance Agreement. Rackspace has been completely deprived of the benefit of
the Forbearance Agreement. Rackspace cannot be adequately compensated for
Parallel Iron&#8217;s breach. Parallel Iron cannot cure its breach. Parallel Iron&#8217;s
behavior&#8212;breaching the only covenant of the contract&#8212;cannot be said to comport
with the standards of good faith and fair dealing.
<br /><br />
IPNav&#8212;in addition to Parallel Iron&#8212;is liable on the Forbearance
Agreement because it was the agent to an unidentified principal. The Forbearance
Agreement did not contain any language releasing IPNav from liability.
</i></blockquote>
Rackspace also notes that it "has been forced to expend time and money to defend" this "wrongfully brought" lawsuit, suggesting they're going to seek attorneys' fees as well.<br /><br /><a href="http://www.techdirt.com/articles/20130406/22502722617/rackspace-sues-famed-patent-troll-breach-contract.shtml">Permalink</a> | <a href="http://www.techdirt.com/articles/20130406/22502722617/rackspace-sues-famed-patent-troll-breach-contract.shtml#comments">Comments</a> | <a href="http://www.techdirt.com/articles/20130406/22502722617/rackspace-sues-famed-patent-troll-breach-contract.shtml?op=sharethis">Email This Story</a><br />
 ]]></description>
<slash:department>not-for-the-first-time</slash:department>
<wfw:commentRss>http://www.techdirt.com/comment_rss.php?sid=20130406/22502722617</wfw:commentRss>
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<item>
<pubDate>Wed, 10 Apr 2013 09:41:56 PDT</pubDate>
<title>Uh Oh: US Postal Service Wants To Better 'Monetize' Its 'Intellectual Property'</title>
<dc:creator>Mike Masnick</dc:creator>
<link>http://www.techdirt.com/articles/20130410/07413722660/uh-oh-us-postal-service-wants-to-better-monetize-its-intellectual-property.shtml</link>
<guid>http://www.techdirt.com/articles/20130410/07413722660/uh-oh-us-postal-service-wants-to-better-monetize-its-intellectual-property.shtml</guid>
<description><![CDATA[ Via <a href="https://twitter.com/cjoh/status/321990732929978368" target="_blank">Clay Johnson</a> we learn of a "solicitation" from the US Postal Service for <a href="https://www.fbo.gov/index?s=opportunity&#038;mode=form&#038;id=17b9bf0ed7d5ada76871c3c7d66f3285&#038;tab=core&#038;_cview=0" target="_blank">help in finding better ways to "monetize" its "intellectual property."</a>
<blockquote><i>
The purpose of this solicitation is to procure services to obtain a supplier who possesses specific subject matter expertise in the areas of intellectual property (IP) strategy, the monetization of IP portfolios and the development of Intellectual Asset Management practices.  The purpose of this contract is to evaluate the U.S. Postal Service's ('Postal Service') current IP strategy and define the steps, based on current industry best practices, needed to develop a comprehensive strategy for developing, managing, and monetizing IP.
</i></blockquote>
Now, the US Postal Service is in this weird space where it is not quite a full government agency, but not quite a fully independent operation (or it can be seen as either <a href="http://usgovinfo.about.com/od/consumerawareness/a/uspsabout.htm" target="_blank">depending on how you squint</a>).  However, it is supposed to be serving the public, and becoming a patent troll (what this is really about) hardly seems like it will serve the public's interest.  As is established under <a href=http://www.law.cornell.edu/uscode/text/39/101" target="_blank">39 USC 101</a>, the Postal Service is supposed to be about serving the public interest:
<blockquote><i>
The United States Postal Service shall be operated as a basic and fundamental service provided to the people by the Government of the United States, authorized by the Constitution, created by Act of Congress, and supported by the people. The Postal Service shall have as its basic function the obligation to provide postal services to bind the Nation together through the personal, educational, literary, and business correspondence of the people. It shall provide prompt, reliable, and efficient services to patrons in all areas and shall render postal services to all communities. The costs of establishing and maintaining the Postal Service shall not be apportioned to impair the overall value of such service to the people. 
</i></blockquote>
Separately, the law notes:
<blockquote><i>
In determining all policies for postal services, the Postal Service shall give the highest consideration to the requirement for the most expeditious collection, transportation, and delivery of important letter mail. 
</i></blockquote>
I can't see how shaking down competitors like UPS and Fedex will serve that well.
<br /><br />
And, of course, that's likely what this is all about.  Everyone knows there is tremendous controversy over the US Postal Service and its financial situation (which is distorted by the way it is required to <a href="http://www.washingtonpost.com/blogs/federal-eye/post/postal-service-federal-pension-contributions-105-percent-overfunded/2012/06/25/gJQAXrva2V_blog.html" target="_blank">handle its pensions</a>).  So the USPS is desperate for alternate ways to get money in.  From the brief quip in the solicitation, it certainly sounds like it's looking for ways to jump into the patent game and seek licensing revenue from others.  The last thing we really need is the US Postal Service waving around patents, demanding payments from more innovative competitors, but it sounds like that may be what we're about to get.<br /><br /><a href="http://www.techdirt.com/articles/20130410/07413722660/uh-oh-us-postal-service-wants-to-better-monetize-its-intellectual-property.shtml">Permalink</a> | <a href="http://www.techdirt.com/articles/20130410/07413722660/uh-oh-us-postal-service-wants-to-better-monetize-its-intellectual-property.shtml#comments">Comments</a> | <a href="http://www.techdirt.com/articles/20130410/07413722660/uh-oh-us-postal-service-wants-to-better-monetize-its-intellectual-property.shtml?op=sharethis">Email This Story</a><br />
 ]]></description>
<slash:department>this-will-not-end-well</slash:department>
<wfw:commentRss>http://www.techdirt.com/comment_rss.php?sid=20130410/07413722660</wfw:commentRss>
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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>
<wfw:commentRss>http://www.techdirt.com/comment_rss.php?sid=20130408/08244222623</wfw:commentRss>
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<pubDate>Mon, 8 Apr 2013 15:53:30 PDT</pubDate>
<title>More Details Revealed On The Patent Lawyers Demanding $1000 For Every Worker At Companies Using Scanners</title>
<dc:creator>Mike Masnick</dc:creator>
<link>http://www.techdirt.com/articles/20130408/02163322621/more-details-revealed-patent-lawyers-demanding-1000-every-worker-companies-using-scanners.shtml</link>
<guid>http://www.techdirt.com/articles/20130408/02163322621/more-details-revealed-patent-lawyers-demanding-1000-every-worker-companies-using-scanners.shtml</guid>
<description><![CDATA[ Earlier this year we <a href="http://www.techdirt.com/articles/20130102/08174721543/patent-troll-shell-companies-shake-down-small-businesses-1k-per-employee-using-network-scanner.shtml">wrote</a> about Joe Mullin's excellent reporting on a series of patent holding shell companies, led by one called MPHJ Holdings, who were <a href="http://arstechnica.com/tech-policy/2013/01/patent-trolls-want-1000-for-using-scanners/" target="_blank">sending demand letters</a> to tons of companies demanding that they pay between $900 and $1200 <b>per employee</b> for using scanners connected to a network with a "scan to email" feature.  Mullin is back with more on MPHJ, <a href="http://arstechnica.com/tech-policy/2013/04/meet-the-nice-guy-lawyers-who-want-1000-per-worker-for-using-scanners/" target="_blank">talking to two of the lawyers working for the patent troll</a>, though the identity of the actual patent holder remains a secret.
<br /><br />
One of the lawyers is heading up the whole threat letter and (expected) litigation campaign (no lawsuits have been filed but "draft" complaints have been sent to various companies, indicating lawsuits will be coming soon) and the other is in charge of talking to "irate" recipients of the shakedown letter.  That lawyer, Jay Mac Rust, apparently is one of a few lawyers who have certain "territories" in this scheme, but in a recorded message that Mullin obtained with a discussion between Mac Rust and one of the letter recipients, Mac Rust explains that he's the one who deals with the angry ones.  Mac Rust repeatedly suggests that letter recipients consult a patent lawyer to find out that this is all "legal."  Of course, doing so also will help people realize just how much a patent lawyer costs and can then do the math on the value of fighting back.
<br /><br />
Also, it's somewhat amusing that a lawyer who claims to have spent time understanding patent law seems quite confused about copyright law.  Mullin tried to reach Mac Rust a bunch of times, only to finally get him to call when told that the article was soon to be published, and would include quotes from the recorded phone call with the letter recipient <i>and</i> a picture of Mac Rust.  Mac Rust didn't like that and said that copyright law meant Mullin couldn't use his photo:
<blockquote><i>
"I'd appreciate you not running a photo of me, anywhere," said Rust. "You know how photographs work, with copyright and all. If there's a photograph up online of me, I own it."
</i></blockquote>
That's not true.  At all.  The copyright is normally with the photographer, not the subject of a photo, for one thing (though the copyrights can be assigned).  But, on top of that Mullin publishing such a photo at Ars Technica is clearly protected by fair use.
<br /><br />
Mullin also runs through some somewhat shady business practices that Mac Rust was sued over in the past, though Mac Rust seems to suggest that the questionable stuff was done by the guy employing him, and for the most part it looks like he's gotten out of the various lawsuits through settlement or dismissal.
<br /><br />
Mullin then talks to the lawyer officially representing MPHJ, who doesn't seem to think there's anything wrong with what he's doing, arguing that inventors deserve to be protected.  He doesn't seem to acknowledge that the "inventor" appears to have "invented" a general idea that lots of people had, but few people implemented, not because the idea wasn't there, but the tech itself wasn't ready.  The fact that the "inventor" on the patent failed to actually successfully sell a product in the market should be indication enough that there was nothing special about the patent itself.  But the lawyer, Bryan Farney, doesn't seem to see how that's an issue.
<blockquote><i>
&#8220;The inventor obviously came up with something that&#8217;s widely used,&#8221; Farney said. &#8220;That happens sometimes.&#8221;
</i></blockquote>
This is the frustrating thing about patent system supporters.  They never seem even marginally willing to admit that there are massive problems that come about when someone gets a patent on a general idea that lots of people have, but which the technology is not yet ready for.  They seem to think this is fine, never acknowledging how they're actually stomping on the basic rights of <i>everyone else</i> who came up with the idea, followed by (in this case) everyone who is <i>using</i> a basic technology offered by nearly every scanner maker today.  There is no way anyone can view this as a reasonable result or the intention of today's patent system.<br /><br /><a href="http://www.techdirt.com/articles/20130408/02163322621/more-details-revealed-patent-lawyers-demanding-1000-every-worker-companies-using-scanners.shtml">Permalink</a> | <a href="http://www.techdirt.com/articles/20130408/02163322621/more-details-revealed-patent-lawyers-demanding-1000-every-worker-companies-using-scanners.shtml#comments">Comments</a> | <a href="http://www.techdirt.com/articles/20130408/02163322621/more-details-revealed-patent-lawyers-demanding-1000-every-worker-companies-using-scanners.shtml?op=sharethis">Email This Story</a><br />
 ]]></description>
<slash:department>those-shakedown-artists-sure-are-nice</slash:department>
<wfw:commentRss>http://www.techdirt.com/comment_rss.php?sid=20130408/02163322621</wfw:commentRss>
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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>Tue, 2 Apr 2013 03:52:11 PDT</pubDate>
<title>Startups Realizing That Patent Trolls Are An Existential Threat</title>
<dc:creator>Mike Masnick</dc:creator>
<link>http://www.techdirt.com/blog/innovation/articles/20130326/17574422472/startups-realizing-that-patent-trolls-are-existential-threat.shtml</link>
<guid>http://www.techdirt.com/blog/innovation/articles/20130326/17574422472/startups-realizing-that-patent-trolls-are-existential-threat.shtml</guid>
<description><![CDATA[ Most people used to think that patent trolls tended to focus on bigger companies -- those with huge bank accounts who'd rather pay the troll off than deal with a lawsuit.  But over the last few years, we've been hearing more and more stories about startups hit by patent trolls, who are taking advantage of the fact that a patent lawsuit -- win or lose -- would almost certainly kill the company.   One common tactic?  Wait until a startup announces a <a href="http://www.techdirt.com/blog/innovation/articles/20120709/02383719619/hipmunk-raises-money-is-immediately-threatened-patent-troll.shtml">round of fundraising</a> and then pounce -- knowing that the company (a) has some money and (b) has little time to deal with a lawsuit.  Finally, this issue is getting some attention.  Crain's recently had a piece on <a href="http://www.crainsnewyork.com/article/20130320/TECHNOLOGY/130329996?template=smartphone&#038;X-IgnoreUserAgent=1" target="_blank">patent trolls going "downmarket" after startups</a>, which has some quotes from startup execs (many who want to remain anonymous to avoid further attacks).  One of whom is actually fighting the troll:
<blockquote><i>
"I have more lawyers than I have employees," said the entrepreneur, who asked to remain anonymous for fear he would be the target of even more lawsuits.
</i></blockquote>
That entrepreneur noted that he's stopped paying himself a salary, and his legal bills ($50,000 per month) were rivaling his overall payroll of $63,000 per month.  But he's fighting the troll on principle.
<br /><br />
But, of course, even if he wins, he's not going to get that money back:
<blockquote><i>
Young companies that are looking for venture capital are most likely to settle, so goes the conventional wisdom, because they have limited cash and worry that a lawsuit will scare off investors. It's cheap to bring a lawsuit, but expensive&#8212;$2.5 million on average&#8212;to defend against one. Not surprisingly, the majority of patent suits are settled out of court.
<br /><br />
"The system is so stacked against me," said the e-commerce entrepreneur. "To prove I'm right, it will cost me more money than I have raised in my company's existence. If I win, I don't get the money back, and if I lose, I owe triple damages."
</i></blockquote>
This is part of the reason why the <a href="http://www.techdirt.com/articles/20130227/11543622140/shield-act-targeting-patent-trolls-re-introduced-its-step-right-direction-just-small-one.shtml">SHIELD Act</a> would be a useful step.  While there are still many, many problems with patent trolling, at least it would make it possible to go after trolls for legal fees when the trolls lose.<br /><br /><a href="http://www.techdirt.com/blog/innovation/articles/20130326/17574422472/startups-realizing-that-patent-trolls-are-existential-threat.shtml">Permalink</a> | <a href="http://www.techdirt.com/blog/innovation/articles/20130326/17574422472/startups-realizing-that-patent-trolls-are-existential-threat.shtml#comments">Comments</a> | <a href="http://www.techdirt.com/blog/innovation/articles/20130326/17574422472/startups-realizing-that-patent-trolls-are-existential-threat.shtml?op=sharethis">Email This Story</a><br />
 ]]></description>
<slash:department>time-to-fix-the-problem</slash:department>
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<pubDate>Mon, 1 Apr 2013 15:13:00 PDT</pubDate>
<title>Indian Supreme Court Rejects Trivial 'Evergreening' Of Pharma Patents</title>
<dc:creator>Glyn Moody</dc:creator>
<link>http://www.techdirt.com/articles/20130401/09233022536/indian-supreme-court-rejects-evergreening-pharma-patents.shtml</link>
<guid>http://www.techdirt.com/articles/20130401/09233022536/indian-supreme-court-rejects-evergreening-pharma-patents.shtml</guid>
<description><![CDATA[ <p>
Back in October last year, in the context of India showing itself increasingly sceptical about <a href="https://www.techdirt.com/articles/20120928/09573920539/emerging-countries-take-note-big-pharmas-losing-patent-battles-india.shtml">pharma patents</a> that drive up drug prices beyond the reach of its citizens, we wrote about an important court battle over Novartis's drug Gleevec, sold as Glivec in India.  <a href="http://www.guardian.co.uk/world/2013/apr/01/novartis-denied-cancer-drug-patent-india">The definitive judgement from India's Supreme Court was announced today</a>, reported here by The Guardian:

<i><blockquote>The Indian supreme court has refused to allow one of the world's leading pharmaceutical companies to patent a new version of a cancer drug, a decision campaigners hailed as a major step forward in enabling poor people to access medicines in the developing world.
<br /><br />
Novartis lost a six-year legal battle after the court ruled that small changes and improvements to the drug Glivec did not amount to innovation deserving of a patent. The ruling opens the way for generic companies in India to manufacture and sell cheap copies of the drug in the developing world and has implications for HIV and other modern drugs too.</blockquote></i>

The key issue at stake is a practice known as "evergreening": making small changes to a drug, often about to come off patent, in order to gain a new patent that extends its manufacturer's control over it.  It's a way of cheating on the implicit bargain of patents: that a government-backed monopoly is granted in exchange for the invention entering the public domain at the end of the patent's lifetime.
</p>
<p>
That's what makes today's decision so important.  It's not just about allowing Indian generics manufacturers to offer Glivec for a fraction of the Novartis price; it's equally about establishing the principle that "evergreening" patents won't be as easy in India as it is elsewhere, where the practice is common.  This will allow India's pharma companies to produce a wide range of drugs at low prices that can then be sold to emerging countries unable to afford Western prices.
</p>
<p>
Doubtless, many lives will be saved as a result, but that doesn't seem to be any comfort to the head of Novartis in India, who is <a href="http://www.novartis.com/newsroom/media-releases/en/2013/1689290.shtml">quoted in a press release as saying</a>:

<i><blockquote>"We strongly believe that original innovation should be recognized in patents to encourage investment in medical innovation especially for unmet medical needs," said Ranjit Shahani, Vice Chairman and Managing Director, Novartis India Limited. "We brought this case because we strongly believe patents safeguard innovation and encourage medical progress, particularly for unmet medical needs. This ruling is a setback for patients that will hinder medical progress for diseases without effective treatment options."</blockquote></i>

That's pretty much what you'd expect him to say, since we've heard it here on Techdirt so many times before: without patents that allow monopoly pricing and big profits, there will be no investment in new drugs, and everyone will suffer etc. etc.  But this simply isn't true.  Much of the fundamental research that leads to important new drugs is done in public laboratories, paid for by taxpayers around the world, not by pharma companies.
</p>
<p>
Here, for example, is the story of how Novartis came to gain its highly-lucrative monopoly on Gleevec/Glivec, as told by the key researcher who actually developed it: <a href="https://en.wikipedia.org/wiki/Brian_Druker">Brian Druker</a>, chair of Leukemia Research and professor of medicine at the Oregon Health and Science University Cancer Institute.  <a href="http://www.livemint.com/Opinion/26rbSkGiTxNYKobbO568kL/Don8217t-abuse-patents-scientists.html">He explained how the crucial initial research was carried out</a> in an opinion piece published on the Livemint site in 2007:

<i><blockquote>The basic research that led to the identification of enzyme inhibitors for CML [Chronic Myeloid Leukaemia -- the main condition that Glivec is designed to treat] dates back to 1960 with the identification of the Philadelphia chromosome in patients with CML by researchers at the University of Pennsylvania, Peter Nowell and David Hungerford. In 1973, Janet Rowley at the University of Chicago determined that the abnormal chromosome was due to a translocation of genetic material.</blockquote></i>

No pharmaceutical companies seem to have been involved in this early work, and they were also minor players in the crucial move out of the laboratory, into product development, as Druker explains:

<i><blockquote>In 1993, I moved to Oregon Health Sciences University in Portland and had a single goal of finding a company that had the best inhibitor for Bcr-Abl [the cancer-causing protein] and to bring it into clinical trials. My work in Oregon on a therapy for CML was primarily funded by public sources, particularly the National Cancer Institute. My persistence with scientists at Ciba-Geigy (now Novartis) helped to keep the development of imatinib on their agenda despite uncertainty from product managers.</blockquote></i>

So not only was the drug developed largely thanks to public funds, but the pharma company that ended up making all the profits from it wasn't even hugely enthusiastic about the project initially: it was only Druker's "persistence" that led to the drug being approved.  And if you're wondering about his views on the current world of pharma, with its stratospheric prices and a habitual recourse to evergreening to extend patents way beyond their original life-span, here's what he wrote back in 2007:

<i><blockquote>Pharmaceutical companies that have invested in the development of medicines should achieve a return on their investments. But this does not mean the abuse of these exclusive rights by excessive prices and seeking patents over minor changes to extend monopoly prices. This goes against the spirit of the patent system and is not justified given the vital investments made by the public sector over decades that make the discovery of these medicines possible. </blockquote></i>

The fact that many key drugs have only been possible thanks to those "vital investments made by the public sector" is nearly always overlooked by defenders of the pharma patent system.  It's another reason why the Indian Supreme Court's decision is not only right, but just.
</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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 ]]></description>
<slash:department>saving-lives</slash:department>
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