WIPO: Informal Economy Innovates In The Absence Of Intellectual Monopolies

from the well,-look-at-that dept

One of the problems with the debates around copyright and patents is that they too often assume that intellectual monopolies are necessary in order to promote innovation or even basic economic activity. But that overlooks all kinds of domains where that's not true. In the field of technology, free software and the other open movements based on sharing are familiar examples of this kind of thing. Less well known so are the so-called "informal economies" found in many parts of the world.

To its credit, WIPO has commissioned a report on this whole area, entitled "Conceptual study on innovation, intellectual property and the Informal economy" (pdf). Here's how it defines the informal economy (IE):

The most appropriate conceptualization of the IE is as a continuum from formal to informal, where different activities and actors occupy different points along this continuum. The transition from informal to formal status is gradual; single firms, households, and workers may carry out some activities informally and others formally at the same time.

Despite that vagueness, the informal economy is important for many countries:

Estimates suggest that over the past two decades, informal employment or employment in the IE made up more than half of non-agricultural employment in most middle- and low-income countries. Sub-Saharan Africa is the region with the largest estimates for the contribution of the informal sector to gross domestic product (GDP): the IE makes for nearly two-thirds of GDP including agriculture and half of non-agricultural gross value-added (GVA). It is followed by India, with around 50% of total GDP. Then come countries from the Middle East, North Africa and Latin America.

For Techdirt readers, the most interesting part of the report will probably the chapter that concerns the use of what it calls "Mechanisms to appropriate returns from innovation in the informal economy", including "formal appropriation" through intellectual monopolies -- or, rather, their absence:

On the one hand, it can be argued that the absence of formal appropriation and the work in clusters make up the strengths of the IE's innovation system. In this view, the innovation system in the IE largely rests on "collective learning experiences" based on low entry barriers and free flows of knowledge. The dynamics among similar enterprises in collective geospatial clusters determine rates of innovation, economic successes and the value of the cluster. Individual firms or economic units are not the key determinants of innovation and efficiency.

Appropriation efforts must also be considered in light of the social systems -- specifically family structures, community networks and commercial clusters -- within which the IE operates. Knowledge flows are characterized by trust, reputation, reliability, social and cultural signaling, and the willingness to pool resources and collaborate. This facilitates access to information, and critically reduces transaction costs.

Clearly, in this context, the notion of formal appropriation of ideas can be considered alien and inadequate in this IE context. As one study suggests, actors believe that formal IP based on exclusions and proprietary knowledge is not compatible with the knowledge diffusion and learning processes of the IE which are based on communities, clusters and the exchange of information.

Naturally, as a report commissioned by WIPO, the opposing viewpoint is also considered:

On the other hand, and in contradiction to the above view, it has been argued that the presence of perpetual copying and absence of appropriation mechanisms is seen as a barrier to scaling up innovative activity in the IE. Entrepreneurs are unable to develop their businesses beyond a certain stage as they lack exclusive rights to or control over their innovations. Therefore, they have fewer incentives to invest in machines or human capital (e.g., training new apprentices), and are unable to reach certain economies of scale.

Firms may also forgo the possibility to specialize in different styles and techniques, as copying is the norm. The absence of branding or certificates/labels, leading to anonymity of the sector's products in the eyes of consumers, is said to prevent producers of good quality products from being rewarded.

Due to this systematic effect, only small incremental improvements in processes and some incremental improvements or adaptation of products are likely to be achieved. Economic growth and productivity gains in the informal sector are hence below par. The IE might also have a negative influence on the formal sector. The reasoning behind this is that informal firms that fail to comply with various economic regulations or to meet their tax obligations are able to expand and take market share away from formal firms, even when they are less efficient overall. At worst, economists are concerned that informal firms may also undermine the incentives of formal sector firms to innovate, adopt new technologies, develop their IPRs or develop brands.

There seem to be a lot of assumptions in there -- for example, that those operating in the informal economy don't pay their taxes fully. That's conflating the black economy, where taxes are certainly dodged, with the informal economy, which is about how work is organized, not its compliance with the law. Similarly, the assertion that companies will give up innovating just because others don't try to patent everything they produce is contradicted by the experience of open source, which eschews patents, but has driven an accelerated pace of innovation in the world of proprietary software.

Despite these biases, the report is a valuable contribution to an area that has been largely overlooked until now. The more that WIPO and its world become cognizant of the very different nature of the informal economy, the better it will be for them -- and for future debates about patents and copyright.

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Is Encryption Effective Against Snooping? German Government Says No, Snowden Says Yes

from the maybe-not-the-real-problem dept

The revelations of Edward Snowden about the NSA's snooping of citizens both inside and outside the US are posing more questions than they answer at the moment. One key area is whether the use of encryption -- for example for email -- is effective against the techniques and raw power available to the NSA (and equivalents in other countries). That's something that has come up before in the context of the UK's Snooper's Charter. When a top official there was asked whether the proposed surveillance technology would be able to cope with encrypted streams, he replied: "it will." Snowden's claims about massive, global spying makes the issue even more pertinent.

Here's one view, from Germany. Politicians from the Die Linke party posed a number of questions to their government on the subject of the latter's use of surveillance techniques (original PDF in German). Most of the answers were the kind of thing you might expect -- "we can't possibly go into details" etc. etc. -- but one was surprising. To the question:

Is the technology used also capable of decrypting at least partially, or evaluating, encrypted communications (eg via SSH or PGP)?

Back came the answer:

Yes, the technology used is generally able to do that, depending on the type and quality of the encryption.

But Edward Snowden doesn't agree. When he was asked in an online Q&A session on the Guardian Web site the following question:

Is encrypting my email any good at defeating the NSA survelielance? Id my data protected by standard encryption?

He replied:

Encryption works. Properly implemented strong crypto systems are one of the few things that you can rely on. Unfortunately, endpoint security is so terrifically weak that NSA can frequently find ways around it.

In discussions about the German government's claim that it can crack encryption in certain circumstances, some suggested that maybe it could -- not directly, but using the malware that Techdirt has written about before. So even if the question as to the efficacy of encryption itself is still rather up in the air, there seems to be a consensus that the real weakness lies in letting people gain access to your system.

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First French File-Sharer Sentenced To Disconnection Under Hadopi; But Judgment May Be Unenforceable

from the talk-about-waste-of-time dept

As we've noted before, Hadopi has been a colossal failure on just about every metric, and now seems on the way out. But French taxpayers' money is still being wasted on the scheme, which continues to send out huge numbers of warnings. Ironically, given its imminent demise, Hadopi seems to have finally claimed its first disconnection victim, as PC Inpact reports (original in French.) The person involved has been sentenced to disconnection for 15 days, and must pay a €600 fine. Strangely, it seems that he or she shared only a couple of works, so even that brief period seems harsh. However, there is still scope for an appeal, so the sentence is not yet definite.

And as PC Inpact explains, even if it is confirmed, it may be unenforceable: although access to the Web can be cut, Hadopi's rules state that the filtering must not affect email, private messaging, telephone or any associated TV services. Since these are typically all provided together, that may be tricky, or even impossible. Hadopi says it only hands out suspensions: it doesn't concern itself about how -- or even if -- they can be implemented.

So after years of operation, all that the three-strikes approach has to show for the millions that have been spent, are a handful of convictions: one where someone was fined but innocent, and another where the person involved probably can't be disconnected anyway. Great work, Hadopi.

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Google Proposes Clever Video Codec License -- But The Real Problem With Patent Pools Remains

from the not-the-answer dept

A couple of years back, Techdirt wrote about Google's laudable attempt to open source its VP8 video codec, based around technologies it had acquired with the On2 company in 2009. That was not simply a matter of releasing the code, though, because of claims by some that VP8 infringed on their patents. MPEG-LA, the private company that manages the H.264 patent pool, even went so far as to put out a call for patents that might cover VP8, which in turn led to the US Justice Department investigating whether the move violated anti-trust law.

That investigation probably concentrated the minds at MPEG-LA, since in March of this year, it made the following announcement (pdf):

Google Inc. and MPEG LA, LLC announced today that they have entered into agreements granting Google a license to techniques that may be essential to VP8 and earlier-generation VPx video compression technologies under patents owned by 11 patent holders. The agreements also grant Google the right to sublicense those techniques to any user of VP8, whether the VP8 implementation is by Google or another entity. It further provides for sublicensing those VP8 techniques in one next-generation VPx video codec. As a result of the agreements, MPEG LA will discontinue its effort to form a VP8 patent pool.

Good news, but not the end of the story. Even though MPEG-LA had licensed technologies to Google, the big question was under what terms. Making VP8 available to users of free software was potentially a problem, since it is not possible in general for patented technologies to be licensed for use with open source programs: no per-copy fee can be charged, and necessary permissions must automatically be passed on with any copy that is made. In other words, for free software, licenses need to be not just royalty-free, but restriction-free. The concern was that the deal agreed between Google and MPEG-LA would preclude that.

Indeed, when Google finally published the draft version of its VP8 Patent Cross-license Agreement, some in the free and open source (FOSS) world found unusual elements that raised questions about its compatibility with standard FOSS licenses. This has prompted the Software Freedom Law Center -- one of the key points of reference for legal matters in the world of free software -- to offer the following comments addressing those concerns:

Critics focus on two provisions in particular: §2, which requires would-be licensees to explicitly accept the license terms, and §3, which limits the license's "field of use" to implementations of VP8. Both would be unacceptable in a FOSS copyright license on software, but in the context of this particular free-standing third-party patent license, neither provision interferes with FOSS licensing or the freedoms it protects.

Should the developers of a FOSS VP8 implementation accept this license, they would not be required to pass on any restrictions limiting users' rights to copy, modify, and redistribute free programs. Users would be neither required to accept the patent license nor restricted from adding new capabilities to the software. They would have the same rights as they would if the developers had never accepted the patent license: those granted by the software's FOSS license.

If this patent license interfered with the freedoms guaranteed to users by FOSS licenses, it would be incompatible with the OSD [OPen Software Definition] and FSD [Free Software Definition]. Because the patent license does not restrict those freedoms, but rather affords some new, limited protections to users and developers within the field of use, it improves on the current situation. Without this license, the patent holders would be in a position to threaten those users and developers as well as others.

Of course, that underlines that the real problem here is that holders of even vaguely-relevant patents might band together to threaten to sue the creators and users of new codecs, and thus act as a brake on innovation. Although the proposed Google license is a clever hack around that, what we really we need is a thoroughgoing revision of the system that allows such anti-competitive patent pools to be created at all.

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Do Dutch Spies Also Have Access To PRISM's Data? And If So, Who Else Does?

from the clear-as-mud dept

In the wake of the leaks about NSA's spying activities around the world, one of the interesting subsidiary questions is: who else had access to this stuff? We know that the UK did, and now there are indications the Dutch did as well, according to this report on DutchNews.nl:

Justice minister Ivo Opstelten on Tuesday refused to comment on claims the Dutch security service AIVD works together with the US secret services in collecting information from email and social media traffic.

…

Dutch security service AIVD has also received information on email and social media traffic via US spy system PRISM, the Telegraaf reports on Tuesday.

Some pretty dramatic claims are being made:

If the AIVD lists an American address as suspicious, it is supplied all the information within five minutes, a source told the paper. The source worked for the department which monitored potential Dutch Muslim extremists, the paper said.

Dutch companies also cooperated with the US authorities' request for information, the source said, claiming that 'there are agents ready to deal with requests for information inside companies and institutions.'

'There are a couple of those secret programmes like Prism active in the Netherlands,' the source is quoted as saying.

There are a few points to note here. First, this is a report about a story in the Dutch newspaper Telegraaf, which draws on unnamed sources. So the chain of information is quite long, and it's likely that details have been lost or mischaracterized along the way. It's also worth noting that PRISM is not the only system mentioned here for gleaning information about people. That's probably muddying the waters yet more, as sources reveal tantalizing information about other spying initiatives that then get subsumed under the general heading of PRISM, simply because it's in the headlines at the moment.

That's not to minimize the shocking nature of these revelations -- the idea that spies around the world may be accessing within minutes any private information they want, is troubling -- merely to note that the picture we have of what is going on remains frustratingly vague. And that, of course, is an argument for more transparency from the authorities, both in the US and elsewhere, about what is really happening to our personal information when we go online, and who has access to it.

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Is The US Using Prism To Engage In Commercial Espionage Against Germany And Others?

from the well,-that-would-be-different dept

As we noted last week, one of the key claims following the revelations about the Prism program was that it was aimed at those outside the US, and that US citizens were caught up in it only incidentally. A further leak concerned the Boundless Informant analysis tool, one of whose maps showed which regions of the world were subject to most surveillance. Along with obvious hotspots like Iran and Pakistan, Germany too was among those of particular interest, as was the US (whoops.) A story on reason.com offers a clue as to why that might be.

The blog post focuses on an incident from the time when the whistleblower Edward Snowden worked for the CIA, rather than the NSA. Here's the original text in the Guardian:

By 2007, the CIA stationed him with diplomatic cover in Geneva, Switzerland. His responsibility for maintaining computer network security meant he had clearance to access a wide array of classified documents.

That access, along with the almost three years he spent around CIA officers, led him to begin seriously questioning the rightness of what he saw.

He described as formative an incident in which he claimed CIA operatives were attempting to recruit a Swiss banker to obtain secret banking information. Snowden said they achieved this by purposely getting the banker drunk and encouraging him to drive home in his car. When the banker was arrested for drunk driving, the undercover agent seeking to befriend him offered to help, and a bond was formed that led to successful recruitment.

In that quotation, there's the nugget of information that the CIA was not targeting terrorists on this occasion, at least not directly, but "attempting to recruit a Swiss banker to obtain secret banking information". That raises an interesting possibility for the heightened interest in Germany, as revealed by Boundless Informant.

Given that the NSA is gathering information on a large scale -- even though we don't know exactly how large -- it's inevitable that some of that data will include sensitive information about business activities in foreign countries. That could be very handy for US companies seeking to gain a competitive advantage, and it's not hard to imagine the NSA passing it on in a suitably discreet way.

Germany is known as the industrial and economic powerhouse of Europe, so it would make sense to keep a particularly close eye on what people are doing there -- especially if those people happen to work in companies that compete with US firms. In other words, just as as the CIA was looking to obtain "secret banking information" in Switzerland, it seems quite likely that the NSA also comes into the possession of similarly sensitive commercial data during its German trawls.

If that were confirmed, it would certainly change the debate somewhat. The standard justification that massive surveillance is indispensable in the fight against terrorism if lives are to be saved, would be replaced by the rather weaker one that it's rather handy being able to spy on Germany since its industrial secrets can be pilfered. It will be interesting to see whether any future revelations about the NSA's activities shed more light on this area.

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NSA Spying Revelations Start To Cause Outrage In Europe; China Next?

from the just-the-beginning dept

News that the NSA has unfettered access to most of the leading Internet services inevitably has an international dimension. After all, Microsoft, Yahoo!, Google and the rest of the Naughty Nine all operate around the world, so spying on their users means spying on people everywhere. Indeed, as Mike explained earlier today, the NSA is actually trying to quell criticism by selling this news as something that purely concerns non-Americans (although that's clearly rubbish.)

Despite that fact, the European Commission's Home Affairs department made the following reply to the journalist David Meyer when he asked them for a statement of the latest revelations:

We do not have any comments. This is an internal U.S. matter.

It was only later that it realized this was a ridiculous position, and issued the following statement:

We have seen the media reports and we are of course concerned for possible consequences on EU citizens' privacy. For the moment it is too early to draw any conclusion or to comment further. We will get in contact with our U.S. counterparts to seek more details on these issues.

That dismissive initial comment followed by the rather feeble backtracking suggests that the European politicians have not yet realized how big a problem this is going to be for them, as well as for the US authorities. For example, The Guardian has confirmed today that the UK has been tapping into Prism for a while:

The UK's electronic eavesdropping and security agency, GCHQ, has been secretly gathering intelligence from the world's biggest internet companies through a covertly run operation set up by America's top spy agency, documents obtained by the Guardian reveal.

Specifically:

It says the British agency generated 197 intelligence reports from Prism in the year to May 2012 -- marking a 137% increase in the number of reports generated from the year before. Intelligence reports from GCHQ are normally passed to MI5 and MI6.

Already, one Labour MP, Tom Watson, has said that he will table questions in the House of Commons next week, and it seems likely that others will be demanding to know how much the UK government knew of this pervasive spying activity, what information it received -- and what it gave in return.

Another European asking questions is Peter Schaar, Germany's federal commissioner for data protection, who told David Meyer the following:

Given the large number of German users of Google, Facebook, Apple or Microsoft services, I expect the German government... is committed to clarification and limitation of surveillance.

He then went on to make an important connection:

In addition, the reports illustrate the importance of strengthening the European data protection law. The dilatory attitude of the EU Interior and Justice Ministers towards the Privacy Policy reform package is a completely wrong signal.

As Techdirt has reported, new data protection rules currently being discussed by the European Union have come under fierce attack by US companies, who want them watered down. For the most part, they were succeeding, but it's possible that the revelations that the very same companies who have lobbied so hard to neuter EU regulations have allowed the NSA to access customer data may start to tip the balance the other way.

Some want to go further than simply strengthening data protection in Europe. The European privacy advocate, Alexander Hanff, is calling for the US's "safe harbor" status to be revoked. Here's why that matters:

The European Commission's Directive on Data Protection went into effect in October of 1998, and would prohibit the transfer of personal data to non-European Union countries that do not meet the European Union (EU) "adequacy" standard for privacy protection. While the United States and the EU share the goal of enhancing privacy protection for their citizens, the United States takes a different approach to privacy from that taken by the EU.

In order to bridge these differences in approach and provide a streamlined means for U.S. organizations to comply with the Directive, the U.S. Department of Commerce in consultation with the European Commission developed a "Safe Harbor" framework and this website to provide the information an organization would need to evaluate -- and then join -- the U.S.-EU Safe Harbor program.

Without Safe Harbor status, no US company would be allowed to transfer personal data about Europeans out of the EU. It's unlikely that the European Commission would contemplate such a drastic move, but it's an indication of how high feelings are starting to run -- and this is only a few hours after the NSA story broke.

Mind you, however bad the situation is in Europe, President Obama can take comfort from the fact that it could be worse:

Peng Liyuan, the wife of Chinese leader Xi Jinping, appears to have an iPhone. And now, according to reports, US intelligence agencies may be spying on iPhone users through a secret data harvesting program. Does that mean there’s a possibility that the US is spying on the private messages of China’s first lady?

If confirmed, I don't think that's going to go down too well with the Chinese government...

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Australia Sets New Overblocking Record: Aims For One Site, Takes Down 250,000

from the whoops dept

Overblocking is not a new problem -- over two years ago, Techdirt wrote about an instance where Homeland Security took down 84,000 innocent sites at a stroke -- so you might have thought that those employing this blunt instrument would take a little more care these days. However, things seem to be getting worse, not better. In Australia, the Australian Securities & Investments Commission (ASIC) has just scored a whopper:

The largest number of sites censored when attempting to block one particular site ASIC believed was defrauding Australians was 250,000. Of these, ASIC said about 1000, or 0.4 per cent, were active sites. It said the 249,000 other sites hosted "no substantive content" or offered their domain name up for sale, rather than hosting a fully-fledged active site.

I wonder how the ASIC established that 249,000 had "no substantive content". I can't believe it really checked all of them. And that's the big problem with overblocking: when huge numbers of sites get taken down by mistake, there's no way of telling what just fell off the Web, and what obscure but possibly important information is no longer available.

At least ASIC realizes that its current ham-fisted approach isn't acceptable:

ASIC told senate estimates in its opening statement that it was now examining how it could ensure only a site's specific domain name was blocked and ways it could alert the public to a site being blocked via a pop up page. It was also examining ways such a page could indicate why access was blocked and to whom queries could be made to dispute a block.

That's good, but maybe it would have been better if it had explored those options before shutting down nearly a quarter of a million innocuous sites by mistake.

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People Begin To Wake Up To Massive Dangers Of Investor-State Dispute Resolution

from the this-is-the-big-one dept

Techdirt has been writing about investor-state dispute resolution (ISDR) mechanisms in international trade treaties like TPP and TAFTA/TTIP for two main reasons. First, because of the scale involved: ISDR allows companies to sue entire countries for huge sums, alleging loss of future profits. And secondly, because few seem aware of this growing threat to the national sovereignty of many countries around the world. That finally seems to be changing, with a number of articles warning about the dangers of ISDR appearing recently.

For example, here's a report from the Transnational Institute looking at ISDR in the proposed free trade agreement between the EU and Canada (CETA):

This briefing highlights the public debate around fracking; the interests of Canadian oil and gas companies in shale gas reserves in Europe; and the impacts an investment protection clause in the proposed CETA could have on governments’ ability to regulate or ban fracking. It examines the case study of the company Lone Pine Resources Inc. versus Canada, which, using a similar clause is challenging a fracking moratorium and suing the Canadian government for compensation, and warns this could be the state of things to come in Europe. It recommends that the investor-state dispute settlement mechanism should not be included in CETA.

An article on the Huffington Post site considers ISDR in TPP:

That agreement aims to secure a binding agreement among signatory countries for "trade" rules that would trump national laws in a wide range of areas, including rights to protect the health of the public. It could require countries to rescind national regulations, even laws that protect public health, in the face of claims that they restrict trade.

An important post from Corporate Europe Observatory points out (as Techdirt did) that the leaked European Commission mandate for TAFTA/TTIP explicitly includes ISDR:

Leaked draft versions of the EU negotiating mandate for a far-reaching free trade agreement with the US -- to be approved at next week's trade minister meeting (14 June) -- reveal the European Commission's plans to enshrine more powers for corporations in the deal. The proposal follows a persistent campaign by industry lobby groups and law firms to empower large companies to challenge regulations both at home and abroad if they affect their profits. As a result, EU member states could soon find domestic laws to protect the public interest challenged in secretive, offshore tribunals where national laws have no weight and politicians no powers to intervene.

It goes on to give an excellent summary of how ISDR has already been used to sue governments around the world, and discusses the case of Chevron, and its single-minded efforts to get ISDR into TAFTA/TTIP:

Chevron is currently engaged in a controversial legal battle with Ecuador. The company initiated arbitration to avoid paying US$18 billion to clean up oil-drilling-related contamination in the Amazonian rainforest, as ordered by Ecuadorian courts. The case has been lambasted as "egregious misuse" of investment arbitration to evade justice. No wonder Chevron dedicated its complete contribution to the US government's TTIP consultation to investment protection, "one of our most important issues globally" as they put it.

Finally, a new 24-page report from The Democracy Center (available in English and Spanish), entitled "Unfair, Unsustainable, and Under the Radar," offers perhaps the most approachable introduction to this subject:

We look at how the international investment rules system is being used to punish El Salvador for blocking poisonous gold mining, against Germany for stopping nuclear power, and to attack public health regulations for the tobacco industry in Uruguay. And we flag the next target for the system: government ability to regulate 'fracking'.

Unfortunately, wide knowledge of this system and how it works doesn't really exist beyond a small collection of lawyers and advocates. Published in May 2013 this report explains what seems to many a highly technical issue for a non-technical audience, and in so doing aims to help put a much wider public spotlight on this corporate power grab while there is still time to fight it.

Let's hope so: some of the world's most powerful corporations have realized that ISDR allows them to override national laws by invoking a newly-invented right to expected future profits, and are pushing hard to enshrine that "right" in all the main trade agreements -- TPP, CETA and now TAFTA/TTIP. If they succeed, it will undoubtedly become a standard part of every new FTA thereafter, and practically impossible to eradicate in the future.

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June 4th: The Struggle Of Memory Against Forgetting

from the rewriting-history dept

Today is June 4th, a day pretty much like any other day in most parts of the world. But in China, June 4th has a unique significance because of the events that took place in Tiananmen Square on that day in 1989. This has led the Chinese authorities to introduce a range of increasingly repressive measures designed to minimize the ability of people to find out about what happened then, or to commemorate it, as the International Herald Tribune explains:

Today. Tonight. June 4. Big Yellow Duck.

Type any of these seemingly innocuous words and phrases, in Chinese, into Sina Weibo, the country's most popular microblog with more than 500 million registered users, and a message shows up that says: "According to relevant laws, statutes and policies," the results of the search "cannot be shown."

Wait, Big Yellow Duck? The reason that term is blocked is the following image that has been circulating on Sina Weibo and Twitter:

That's a reference to the iconic picture of what has come to be known as the "Tank man" -- a lone individual standing in front of a line of tanks, taken in Beijing on June 5, 1989.

For some time, the Chinese authorities have been playing this game of Whac-A-Mole, as new ways of referring to June 4th are devised -- one popular one was "May 35th". That's clearly something that authorities can't win, since people will always be able to devise new, oblique ways of indicating the date and events. But according to this article in the Wall Street Journal, it looks like the Chinese authorities are trying out a new tactic for handling this dangerous topic:

On Friday, a China Real Time search for "Tiananmen Incident" did not return the customary message from Sina informing the user that search results could not be displayed due to "relevant laws, regulations and policies." Instead the search returned results about a separate Tiananmen incident that occurred on Tomb Sweeping Day in 1976, when Beijing residents flooded the area to protest after they were prevented from mourning the recently deceased Premiere Zhou Enlai.

That's obviously much more subtle than simply blocking these searches, which alerts people to the fact that something is being hidden. The new approach does not block, but filters, returning hits that refer to other, less problematic events. This not only stops people finding out about things like Tiananmen Square in 1989, it creates an alternative narrative that starts to erase the main one:

"They effectively make it look like people are talking about the issue, but there is nothing worthwhile being said," said the Greatfire.org spokesman, who declined to be named due to the sensitivity of the group's work.

"If someone mentioned to you, 'There was an incident in Tiananmen many years ago,' you'd search it and think they were talking about 1976," he said.

As the Wall Street Journal rightly concludes:

The new function is likely to send a chill down the spines of the tens of thousands in Hong Kong and Taiwan who regularly gather to commemorate the massacre, for whom one common refrain comes from Milan Kundera: "The struggle of man against power is the struggle of memory against forgetting."

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Art And Copyright In The Age Of Compulsive Looking

from the ways-of-seeing dept

We wrote recently about how the rise of mobile phones with built-in cameras has led to an irresistible urge to record our experiences everywhere with a digital picture. But what happens when those experiences include works of art, which may still be under copyright? That's the interesting question an article in Art News explores:

We're in an age when people take pictures just about everywhere, an act that photography critic Jörg M. Colberg describes as "compulsive looking." The phenomenon has created a unique set of challenges for art museums, many of which have historically had strict limitations on photography -- either for the purpose of protecting light-sensitive works or because of copyright issues.

The good news is that some art museums are beginning to revisit their old rules, not least because they themselves are starting to share images through social media:

This past January, the Pew Research Center's Internet & American Life Project reported that 97 percent of the more than 1,200 arts organizations it polled had a presence on platforms like Twitter, YouTube, and Flickr.

This makes it difficult for visitors to understand why they can't do the same, and to use photos as starting points for their own creativity:

Every day, users on image-sharing sites such as Tumblr create their own diptychs, collages, and themed galleries devoted to everything from ugly Renaissance babies to Brutalist architecture.

Finally, there is the fact that it is increasingly hard to police bans on photography in museums, and that even trying may not be sensible:

"Guards are spending so much time focusing on someone holding a device that they might not see the person next to them touching the art," says Alisa Martin, senior manager of brand management and visitor services at the Brooklyn Museum, an institution that has allowed photography in the majority of its galleries for roughly half a dozen years. "As the devices get smaller, it gets harder to manage. We have to ask ourselves, are we using our guards appropriately?"

As devices shrink and become always-on -- think Google Glass -- that problem will only grow, as copyright designed for the eighteenth century clashes with technology from the twenty-first century. In a sense, this is the visual equivalent of attempts to stop unauthorized sharing of files online. That's not only futile, but causes copyright companies and governments to obsess about something that is not really a problem, as numerous posts on Techdirt have pointed out. Art museums seem to be learning that it's better to embrace change and turn it to their advantage; it's time others did the same, and started looking at the bigger picture.

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Facebook, Google, Microsoft, Twitter And Yahoo Refuse To Cooperate With UK's 'Snooper's Charter'

from the that's-a-bit-of-a-problem dept

A month ago, we wrote about how the UK's infamous "Snooper's Charter" had been scuppered by Nick Clegg, the UK's Deputy Prime Minister. The Guardian now reveals that top Internet companies may have played a key role in this decision:

The five biggest internet companies in the world, including Google and Facebook, have privately delivered a thinly veiled warning to the home secretary, Theresa May, that they will not voluntarily co-operate with the "snooper's charter".

In a leaked letter to the home secretary that is also signed by Twitter, Microsoft and Yahoo!, the web's "big five" say that May's rewritten proposals to track everybody's email, internet and social media use remain "expensive to implement and highly contentious".

In the letter, originally posted online by the Guardian, but now taken down for some reason, the Internet companies write:

Although it seems that the revised Bill will address some of the concerns we and others raised in evidence to that [Parliamentary] Committee, we expect that the core premise of the Bill -- to create a new form of retention order for the data of UK-based users of communications services -- will remain highly contentious.

…

However, we also do not want there to be any doubt about the strength of our concerns in respect of the idea the UK government would seek to impose an order on a company in respect of services which are offered by service providers outside the UK.

The letter rather pointedly invokes efforts to promote online freedom around the world:

The UK Foreign and Commonwealth Office in particular has played a leading role in promoting the value of freedom of expression on the Internet on the global stage. This freedom of expression is intimately linked to the fact that the Internet services are offered globally unlike traditional media channels, which may be under different degrees of state control in many parts of the world. Key to being able to offer a global Internet service is the understanding that the service provider can work primarily within the legal framework of its home jurisdiction.

It then paints a picture of what might happen if other countries brought in their own Snooper's Charter:

Service providers like ours can and do make reasonable accommodations to reflect local concerns and legal requirements including in the UK. But this is very different from a chaotic world within which every country seeks to impose potentially conflicting requirements on a global service provider in sensitive areas like the retention of personal data.

As the Guardian article explains:

The companies also detail an alternative approach to extend existing arrangements for them to meet the requests for personal data from the police and security services, including a new UK-US bilateral initiative to make the process faster and more efficient.

The letter concludes:

The Internet is still a relatively young technology. It brings enormous benefits to citizens everywhere and is a great force for economic and social development. The UK has rightly positioned itself as a leading digital nation. There are risks in legislating too early in this fast-moving area that can be as significant as the risks of legislating too late. We would urge you to follow the approach we have outlined above and see how far the needs of UK law enforcement can be met by improving existing legal instruments and treaties before making significant legislative changes.

This is a pretty significant move, underlined by the fact that traditional rivals have come together to form a common front against the UK government. If companies like Facebook, Google, Microsoft, Yahoo and Twitter refuse to cooperate with the UK's surveillance plans, it will make the scheme much more difficult to operate, particularly when it comes to spying on encrypted data streams.

Unfortunately, whereas the Snooper's Charter looked pretty moribund a month ago, matters have been changed by the recent brutal murder of a soldier on London's streets. This has led to a knee-jerk reaction from some, who have called for the Snooper's Charter to be revived. But it turns out that the alleged attackers were already known to the UK's secret services, which suggests that the extreme surveillance powers contained in the Snooper's Charter are simply not necessary. Let's hope that the main Internet companies stick to their line of non-cooperation, and that the UK government realizes that the Snooper's Charter is not just pernicious, but unworkable.

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Australian Spies Want To Hack Tor After Realizing It Routes Around Their Surveillance

from the how-daft-can-you-get? dept

One of the key flaws with the data retention schemes being proposed by the UK and elsewhere, supposedly to catch terrorists and serious criminals, is that they won't work. It is trivially easy to avoid surveillance by using encrypted connections, for example those provided by The Onion Router (Tor). This means that the only people who are likely to end up being spied on are innocent members of the public.

According to this article in Crikey, the secret services in Australia have apparently woken up to this fact; but rather than convince their government that data retention is therefore an expensive and intrusive waste of time, they have decided to take the damage to the next level:

In a major admission, the Attorney-General's Department has revealed Australia's intelligence and law enforcement agencies are seeking the legal power to break into internet routing encryption services such as Tor, after admitting the centerpiece of its proposed national security reforms, data retention, will be "trivially easy" to defeat.

This is, of course, an incredibly stupid idea, for reasons that one of Tor's developers, Jacob Appelbaum, explains well in the Crikey piece:

"If they wish to break such [encrypted] services, they ensure that when they use such services, they will also be insecure -- this ensures again that only criminals will have privacy, regular people -- including the police fighting crime -- they will be left out of having strong privacy. This opens business people up to industrial and economic espionage. It also promotes the idea that to make ourselves more secure, we should weaken our networks and add the very backdoors that most attackers work day and night to create," he said.

The plan to create detailed, centralized stores of high-value information about people's Internet and telephone usage already exposes the public to an elevated risk of having personal information accessed and misused. Moving beyond that to break key encrypted Internet services like Tor and virtual private networks (VPNs) would deal another serious blow to online privacy and business confidentiality.

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EU Mandate For TAFTA Leaked: Includes Investor-State Dispute Resolution For Intellectual Monopolies

from the but-what-about-transparency? dept

One of the concerns about TAFTA/TTIP is that it would repeat the mistakes of ACTA and SOPA as far as intellectual monopolies were concerned. This led to a call by a group of public interest organizations for things like copyright and patents to be excluded from TAFTA (disclosure: I was involved in the drawing up of the text.) Needless to say, no notice was taken of that, and a couple of weeks ago the European Parliament duly passed a resolution on TAFTA that said:

the agreement should include strong protection of precisely and clearly defined areas of intellectual property rights (IPRs), including geographical indications, and should be consistent with existing international agreements;

However, the important document is the one from the European Commission laying down the Directives that set the terms for the negotiations. By a happy chance, the German blog netzpolitik.org has just come into possession of a draft of these, and made them freely available (Microsoft Word document.)

The section dealing with intellectual monopolies confirms that they form part of the mandate, but is otherwise not very illuminating:

27. The Agreement shall cover issues related to intellectual property rights and should complement and build upon the TRIPS. The Agreement will reflect the high value placed by both Parties on intellectual property protection and build on the existing EU-US dialogue in this sphere.

28. Negotiations should, in particular, address areas most relevant for fostering the exchange of goods and services with IP content, with a view to supporting innovation. Negotiations should provide for enhanced protection of EU Geographical Indications through the Agreement. Both sides should explore opportunities to address other significant IPR issues.

It will be interesting to see how the attempt to protect EU Geographical Indications -- things like Parma ham -- goes given the US's long-standing dislike of them. But much more significant than this rather perfunctory section on intellectual monopolies is the one dealing with the increasingly-important area of investor-state dispute resolution:

Scope: the investment protection chapter of the Agreement should cover a broad range of investors and their investments, intellectual property rights included, whether the investment is made before or after the entry into force of the Agreement.

...

Enforcement: the Agreement should aim to provide for an effective and state-of-the-art investor-to-state dispute settlement mechanism, providing for transparency, independence of arbitrators and predictability of the Agreement, including through the possibility of binding interpretation of the Agreement by the Parties. State-to-state dispute settlement should be included, but should not interfere with the right of investors to have recourse to the investor-to-state dispute settlement mechanisms.

One of the key phrases here is "intellectual property rights included". That's deeply troubling because it essentially legitimizes attempts to extend a mechanism originally designed to prevent rogue states expropriating physical property from investors to the realm of intellectual monopolies. That is the basis of the argument made by Eli Lilly in suing Canada for $100 million, claiming that its "investment" in developing a drug had been expropriated by the courts there by not granting a patent on it.

It's not hard to imagine a similar approach being taken in the computer world if European countries definitively throw out software patents, as Germany is contemplating. US companies might sue for what they would claim is an "expropriation" of their investment and future rents. Similarly, if the US ever reduces the term of copyright, as the Register of Copyright, Maria Pallante, has called for, European publishers might sue the US government for the "expropriation" of their monopoly rights. The winners here will be big companies and their lawyers; losers will be the public in both the EU and US, who will be forced to "compensate" companies for these supposed losses, and who will find their national laws overruled by secret tribunals.

It's worth reading the whole document, not least because you and I weren't supposed to -- it's marked "restricted". And talking of transparency, here's what the European Commission is instructing its negotiators to push for in this area:

The Agreement will address issues of transparency. To this end, it will include provisions on:

The commitment to consult stakeholders in advance of the introduction of measures with an impact on trade and investment;
The publication of general rules and measures with an impact on international trade and investment in goods and services;
Transparency as regards the application of measures having an impact on international trade and investment in goods or services.

That feeble list of non-measures is hardly what most of us think of as "transparency". But of course, the irony here is that even in the face of this failure to take openness seriously, a leak has already occurred, allowing anyone to read the supposedly confidential document. And judging by what has happened with ACTA and TPP in the past, further leaks of key texts will occur despite the best efforts of the negotiating parties to keep everything behind closed doors. So why not release all documents that have been tabled -- that is, those that are no longer secret? Being able to read them ought to be the right of citizens on both sides of the Atlantic; refusing to distribute them makes a mockery of the idea that the TAFTA/TTIP negotiations are being conducted in the public's name.

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Taiwan's Copyright Proposals Would Combine SOPA With A Dash Of The Great Firewall Of China

from the overkill-much? dept

You might have hoped that the extensive discussions that took place around SOPA a year or so ago would have warned off governments elsewhere from replicating some of the really bad ideas there, like DNS blocking, but it seems that Taiwan didn't get the message, as Global Voices reports:

The Taiwan Intellectual Property Office (IPO) has recently proposed to amend the Copyright Act and provide legal justification of IP and DNS blocking at the Internet Service Providers (ISPs) level through a black list system. The government claims that the amendment is to stop the illegal sharing of copyright movies and music.

Although IPO has stressed that the Internet service providers will only block overseas online platforms which are "specifically designed for copyright infringement activities" or websites which have "obviously violated copyrights", such as Megaupload, the authorities will target online platforms that enhance peer-to-peer transmission including Bit Torrent, Foxy, and FTP sharing.

Of course, as Techdirt readers know, there is no such thing as "obviously violated copyrights" -- that's what judges are for. The idea of of targeting technologies like BitTorrent and FTP is nothing less than an attack on aspects of the Internet itself. And as the article points out, the new powers are almost certain to be abused:

If the Taiwanese copyright amendment is implemented, the Island will have a mechanism that blocks and filters away "illegal websites" that host material that infringes copyright laws. This could be detrimental to sites like YouTube, where users regularly upload videos that may violate copyright laws. Although the company has a system for removing these videos, a law like this could lead to the site being blocked altogether.

The new measures will move Taiwan closer to China's Great Firewall in terms of censorship, and will therefore probably be well-received on the mainland as a result. But there are surely better ways of improving relations between the two countries than instituting these kind of measures that won't stop people sharing unauthorized copies online, but will damage the Internet, and not just in Taiwan.

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Innovators, Public Interest Groups & Open Access Supporters Pull Out Of Talks On EU Copyright In Protest

from the squandered-opportunities dept

Back in February we reported on a worrying attempt by the European Commission to reframe the discussion about modernizing copyright in Europe purely in terms of licensing, reflected in the name of the initiative, "Licences for Europe". Although originally a series of discussions were promised to "explore the potential and limits of innovative licensing and technological solutions in making EU copyright law and practice fit for the digital age," in practice moderators shut down discussions of things like exceptions or even Creative Commons licensing. As far as the Commission was concerned, it seemed the answer to updating copyright for the modern age was just old-style licensing and nothing else.

Those events took place in one of the four "discussion" groups, covering user-generated content (although there weren't many representatives of the users present -- 75% of the participants turned out to be from the copyright industry.) However, it seems that things are equally dire in the group supposedly coming up with solutions for text and data mining (TDM), a technique whereby new information is gleaned by analyzing and comparing large quantities of pre-existing digital texts. Again, the problem was the licensing straitjacket that the Commission insisted on imposing on the discussions.

This inflexibility led to a group of eminent signatories drawn from Nobel prize winners, technology SMEs, research councils, university associations, learned academies, publishers, libraries and law academics from across Europe to send a letter to the European Commission outlining some of the key problems with that approach (pdf). Among other things, it pointed out:

Organisations in the modern world access the internet, or buy and subscribe to digital content in order for humans and computers to read and develop new ideas from what they have lawfully read. We do not accept that the right for computers to read, extract facts and formulate new ideas is a separate right to the right of humans to freely perform the exact same activities.

This is a crucial point: by insisting on licensing as the only solution to text and data mining, the publishers are trying to carve out another monopoly right, and to set themselves up as gatekeepers over the knowledge contained within the articles they publish, as well as controlling access to the articles themselves. Clearly, that places unacceptable burdens on academics, and will throttle research and innovation in Europe, simply for the sake of being able to extract a further monopoly rent for the work carried out by others.

But the European Commission paid no heed, and insisted that licensing was the only way forward for handling text and data mining in Europe. Now a group of researchers, SMEs, civil society groups and open access publishers who were participating in the text and data mining talks, have had enough, as their recent letter makes clear (pdf):

We believe that any meaningful engagement on the legal framework within which data driven innovation exists must, as a point of centrality, address the issue of limitations and exceptions. Having placed licensing as the central pillar of the discussion, the "Licences for Europe" Working Group has not made this focused evaluation possible. Instead, the dialogue on limitations and exceptions is only taking place through the refracted lens of licensing. This incorrectly presupposes that additional relicensing of already licensed content (i.e. double licensing) -- and by implication also licensing of the open internet -- is the solution to the rapid adoption of TDM technology.

This approach also undermines the considerable work that has been done in Europe to increase the amount of Open Access content available and encourage its exploitation. We are concerned, therefore, that our participation in a discussion that focuses primarily on proprietary licenses could be used to imply that our sectors accept the notion of double licensing of as a solution. It is not. We firmly believe that "the right to read is the right to mine".

The European Commission's refusal even to allow people to discuss that issue left only one option:

Given the above, and the fact that we need to prioritise our limited resources in a way which will best help the Commission to create an appropriate legal and environmental framework for data-driven innovation within the EU, we believe our contribution will be more productive outside the "Licences for Europe" framework. Therefore, we can no longer participate in the "Licences for Europe" process.

This is a real slap in the face for the European Commission, and for those who have organized these discussions in such a narrow and uncompromising way. As we saw with the user-generated content track, the sessions there were stacked with industry representatives that supported the Commission's line, thus depriving its outcome of any kind of legitimacy. With the withdrawal of such an important group of stakeholders from the text and data mining discussions, the same is now true for this key area.

As a result, the entire Licences for Europe strategy lies in tatters, since it consists almost entirely of the usual copyright maximalists talking amongst themselves, studiously ignoring the changes brought about by the Internet, and simply demanding even more while offering nothing of value. What's disappointing is that in the wake of ACTA's defeat last year it seemed that the European Commission had finally realized that it could not simply keep applying the upward copyright ratchet, and had recognized that things needed to change if it wanted to avoid more people taking to the streets in protest. The Licences for Europe fiasco shows that the Commission has in fact learned nothing.

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How Long Before A Patent Kills A Hundred Million People?

from the is-this-really-wise? dept

Recent news that Angelina Jolie underwent a preventive double mastectomy because of her elevated risk of developing breast cancer has drawn attention to the Myriad Genetics case currently before the US Supreme Court, and to the whole area of gene patents. Myriad's monopoly has allowed it to set a high price for its tests -- $3000 -- and this is bound to have acted as a disincentive for those who were unable to afford such a sum. It is therefore quite likely that people have died as a result of Myriad's patents.

Here's another case where placing patenting above patients could lead to unnecessary deaths. It involves the SARS-like novel coronavirus that was first noted in Saudi Arabia, as this Reuters story explains:

The virus was identified in September last year, three months after a scientist took a sample from Saudi Arabia to the Erasmus Medical Center in the Netherlands.

"There was a lag of three months where we were not aware of the discovery of the virus," Saudi Arabia's Deputy Health Minister Ziad Memish told the Geneva meeting.

He said it was taken out of the country without permission and Saudi Arabia only learned of its discovery from ProMED, a U.S.-based internet-based reporting system.

The Rotterdam-based Erasmus lab then patented the process for synthesizing the virus, meaning that anyone else who wanted to use their method to study it would have to pay the lab.

The patenting had delayed the development of diagnostic kits and serologic tests for the disease, Memish said.

Fortunately, the virus does not seem to have spread widely during that three-month delay, but next time we might not be so lucky. It seems bordering suicidal that concerns about patenting should over-ride health concerns, especially when a viral pandemic could potentially kill a hundred million people, as it did in 1918. Let's hope that the Supreme Court recognizes this as yet another reason not to allow patents on genes, and that this becomes part of a broader move to share freely vital knowledge that can save lives and alleviate suffering around the world.

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US-EU Trade Deal In Trouble Before It Even Starts?

from the well,-look-at-that dept

For the last few months, Techdirt has been following the surprisingly rapid embrace on both sides of the Atlantic of the proposed transatlantic free trade agreement, known variously as TAFTA or TTIP. Coming out of nowhere, the agreement is being talked about as if its success and benefits are more or less guaranteed.

But this huge project is being driven as much by politics as by economics: both the US and EU see it as a way of re-asserting their influence against the background of a constantly more powerful and assertive China. And that makes progress highly vulnerable to local political shifts, as a bombshell comment from the US side, reported in the Guardian, makes clear:

The Obama administration has warned British officials that if the UK leaves Europe it will exclude itself from a US-EU trade and investment partnership potentially worth hundreds of billions of pounds a year, and that it was very unlikely that Washington would make a separate deal with Britain.

That refers to UK Prime Minister David Cameron's growing problems with the UK Independence Party (UKIP), which wants the UK out of the European Union. The sudden rise of the nationalist and traditionalist UKIP, which recently has won seats in local government and is riding high in the opinion polls, has forced Cameron to agree to hold a referendum on whether the UK should leave the European Union in order to blunt UKIP's appeal to right-wing voters, and to quell a growing rebellion in the ranks of his own Conservative party.

That vote will take place sometime before 2017, which means it may not happen for a few years. But the new uncertainty, coupled with a prospect of the EU being weakened by the UK leaving -- and the US losing its main ally there -- was apparently enough for the Obama team to issue the veiled threat quoted above: that if the UK does leave, it won't be part of TAFTA, nor of any separate trade deal.

Some believe that the ramifications of UKIP's success in forcing Cameron to hold a referendum might be even more significant than simply putting pressure on Cameron to make the case to stay in the EU. For example, Gary Hufbauer, a former US Treasury official, is quoted in the same Guardian article as saying:

the administration's hopes to complete a far-reaching partnership in Obama's term may be over-optimistic and would be torpedoed altogether by a British exit from the EU.

"If the UK separates from the EU, I think will go a long way to derail the TTIP project entirely," Hufbauer said. "There would be a lot of questions raised. The administration has many battles ahead of it. It will add another layer of confusion on an already confused picture, and there will be lots of commercial concerns in the US [from those who] have had their eye on the UK markets."

This unexpected development is a reminder that nothing is certain about TAFTA/TTIP at this stage, least of all the much-touted benefits, which may well prove just as illusory as those of the free trade agreement between the US and Korea.

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How Low Can Drones Go?

from the question-questions-questions dept

As we've pointed out in a few stories, drones aren't necessarily something to worry about. Like any technology, they can be used for good and bad purposes, and shouldn't be dismissed out of hand. But determining where exactly the line between acceptable and unacceptable lies is tricky, as the following story from the Capitol Hill Seattle blog shows:

This afternoon, a stranger set an aerial drone into flight over my yard and beside my house near Miller Playfield. I initially mistook its noisy buzzing for a weed-whacker on this warm spring day.

So how close does a drone have to be to someone's home before it becomes intrusive? Clearly, at some height the air is part of the sky commons that belongs to everyone, as a famous 1946 US Supreme Court decision laid down:

The air is a public highway, as Congress has declared. Were that not true, every transcontinental flight would subject the operator to countless trespass suits. Common sense revolts at the idea.

The post continues:

After several minutes, I looked out my third-story window to see a drone hovering a few feet away. My husband went to talk to the man on the sidewalk outside our home who was operating the drone with a remote control, to ask him to not fly his drone near our home. The man insisted that it is legal for him to fly an aerial drone over our yard and adjacent to our windows. He noted that the drone has a camera, which transmits images he viewed through a set of glasses. He purported to be doing "research". We are extremely concerned, as he could very easily be a criminal who plans to break into our house or a peeping-tom.

Those sound like reasonable concerns. So does that mean that drones with cameras need to fly further away from the property of others than those without, so that the images they capture don't invade people's privacy? How might we set that distance? These and related questions are starting to be posed more frequently, as more drones enter our skies. At some point, we will need to start coming up with some answers that most people find reasonable.

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Why Even Good Hospitals And Doctors Are An Obstacle To Better, Cheaper Healthcare

from the perverse-incentives dept

As we noted in the context of antibiotics, it's well recognized that financial incentives cause the pharmaceutical industry to engage in research that tends to maximize profits rather than maximizing the health of the public. But a widely-circulated article in the Washington Post reveals another kind of bias that may stop us from adopting better ways of keeping people healthy that would also reduce healthcare costs.

This flows from the fact that countries with advanced healthcare systems are no longer dealing mainly with infectious diseases like turberculosis, as they once did, but with chronic ones like heart disease, diabetes, AIDS and many cancers. The key here is how best to manage the disease, particularly among elderly patients, and for that, doctors in hospitals aren't necessarily the best way:

Medicine has been so focused on what doctors can do in the hospital that it has barely even begun to figure out what can be done in the home. But the home is where elderly patients spend most of their time. It's where they take their medicine and eat their meals, and it's where they fall into funks and trip over the corner of the carpet. It's where a trained medical professional can see a bad turn before it turns into a catastrophe. Medicine, however, has been reluctant to intrude into homes.

One company, Health Quality Partners, has focused on doing precisely that:

The program enrolls Medicare patients with at least one chronic illness and one hospitalization in the past year. It then sends a trained nurse to see them every week, or every month, whether they're healthy or sick. It sounds simple and, in a way, it is. But simple things can be revolutionary.

The results certainly are:

According to an independent analysis by the consulting firm Mathematica, HQP has reduced hospitalizations by 33 percent and cut Medicare costs by 22 percent.

And yet Medicare is planning to shelve this pilot program, citing various bureaucratic reasons why it can't continue. Although some supporters of the home-based system maintain that it would be possible to overcome these problems, there remains a more fundamental obstacle to rolling out the Health Quality Partners approach more widely:

Hospitals make money when they do more to patients. They lose money when their beds are empty. Put simply, Health Quality Partners makes hospitals lose money.

So again we seem to be confronted by perverse incentives at the heart of our current healthcare. The better and cheaper way would mean scaling back key parts of the system by instituting regular home visits by nurses, thus reducing the number people sent into hospitals to be treated by physicians. That implies taking on very profitable and thus very powerful business interests, including the doctors themselves. Given that resistance, and Medicare's apparent reluctance to force change by backing the Health Quality Partners system, it seems likely that we will be stuck with an inferior, more costly approach to treating chronic diseases despite knowing what looks like a much better way to do it. Some might call that pretty sick.

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