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Gary Edwards

The True Story of How the Patent Bar Captured a Court and Shrank the Intellectual Commo... - 1 views

www.cato-unbound.org/...rt-shrank-intellectual-commons

patents software-patents

shared by Gary Edwards on 13 Sep 14 - No Cached
  • The change in the law wrought by the Federal Circuit can also be viewed substantively through the controversy over software patents. Throughout the 1960s, the USPTO refused to award patents for software innovations. However, several of the USPTO’s decisions were overruled by the patent-friendly U.S. Court of Customs and Patent Appeals, which ordered that software patents be granted. In Gottschalk v. Benson (1972) and Parker v. Flook (1978), the U.S. Supreme Court reversed the Court of Customs and Patent Appeals, holding that mathematical algorithms (and therefore software) were not patentable subject matter. In 1981, in Diamond v. Diehr, the Supreme Court upheld a software patent on the grounds that the patent in question involved a physical process—the patent was issued for software used in the molding of rubber. While affirming their prior ruling that mathematical formulas are not patentable in the abstract, the Court held that an otherwise patentable invention did not become unpatentable simply because it utilized a computer.
  • In the hands of the newly established Federal Circuit, however, this small scope for software patents in precedent was sufficient to open the floodgates. In a series of decisions culminating in State Street Bank v. Signature Financial Group (1998), the Federal Circuit broadened the criteria for patentability of software and business methods substantially, allowing protection as long as the innovation “produces a useful, concrete and tangible result.” That broadened criteria led to an explosion of low-quality software patents, from Amazon’s 1-Click checkout system to Twitter’s pull-to-refresh feature on smartphones. The GAO estimates that more than half of all patents granted in recent years are software-related. Meanwhile, the Supreme Court continues to hold, as in Parker v. Flook, that computer software algorithms are not patentable, and has begun to push back against the Federal Circuit. In Bilski v. Kappos (2010), the Supreme Court once again held that abstract ideas are not patentable, and in Alice v. CLS (2014), it ruled that simply applying an abstract idea on a computer does not suffice to make the idea patent-eligible. It still is not clear what portion of existing software patents Alice invalidates, but it could be a significant one.
  • Supreme Court justices also recognize the Federal Circuit’s insubordination. In oral arguments in Carlsbad Technology v. HIF Bio (2009), Chief Justice John Roberts joked openly about it:
  • ...17 more annotations...
  • The Opportunity of the Commons
  • As a result of the Federal Circuit’s pro-patent jurisprudence, our economy has been flooded with patents that would otherwise not have been granted. If more patents meant more innovation, then we would now be witnessing a spectacular economic boom. Instead, we have been living through what Tyler Cowen has called a Great Stagnation. The fact that patents have increased while growth has not is known in the literature as the “patent puzzle.” As Michele Boldrin and David Levine put it, “there is no empirical evidence that [patents] serve to increase innovation and productivity, unless productivity is identified with the number of patents awarded—which, as evidence shows, has no correlation with measured productivity.”
  • While more patents have not resulted in faster economic growth, they have resulted in more patent lawsuits.
  • Software patents have characteristics that make them particularly susceptible to litigation. Unlike, say, chemical patents, software patents are plagued by a problem of description. How does one describe a software innovation in such a way that anyone searching for it will easily find it? As Christina Mulligan and Tim Lee demonstrate, chemical formulas are indexable, meaning that as the number of chemical patents grow, it will still be easy to determine if a molecule has been patented. Since software innovations are not indexable, they estimate that “patent clearance by all firms would require many times more hours of legal research than all patent lawyers in the United States can bill in a year. The result has been an explosion of patent litigation.” Software and business method patents, estimate James Bessen and Michael Meurer, are 2 and 7 times more likely to be litigated than other patents, respectively (4 and 13 times more likely than chemical patents).
  • Software patents make excellent material for predatory litigation brought by what are often called “patent trolls.”
  • Trolls use asymmetries in the rules of litigation to legally extort millions of dollars from innocent parties. For example, one patent troll, Innovatio IP Ventures, LLP, acquired patents that implicated Wi-Fi. In 2011, it started sending demand letters to coffee shops and hotels that offered wireless Internet access, offering to settle for $2,500 per location. This amount was far in excess of the 9.56 cents per device that Innovatio was entitled to under the “Fair, Reasonable, and Non-Discriminatory” licensing promises attached to their portfolio, but it was also much less than the cost of trial, and therefore it was rational for firms to pay. Cisco stepped in and spent $13 million in legal fees on the case, and settled on behalf of their customers for 3.2 cents per device. Other manufacturers had already licensed Innovatio’s portfolio, but that didn’t stop their customers from being targeted by demand letters.
  • Litigation cost asymmetries are magnified by the fact that most patent trolls are nonpracticing entities. This means that when patent infringement trials get to the discovery phase, they will cost the troll very little—a firm that does not operate a business has very few records to produce.
  • But discovery can cost a medium or large company millions of dollars. Using an event study methodology, James Bessen and coauthors find that infringement lawsuits by nonpracticing entities cost publicly traded companies $83 billion per year in stock market capitalization, while plaintiffs gain less than 10 percent of that amount.
  • Software patents also reduce innovation in virtue of their cumulative nature and the fact that many of them are frequently inputs into a single product. Law professor Michael Heller coined the phrase “tragedy of the anticommons” to refer to a situation that mirrors the well-understood “tragedy of the commons.” Whereas in a commons, multiple parties have the right to use a resource but not to exclude others, in an anticommons, multiple parties have the right to exclude others, and no one is therefore able to make effective use of the resource. The tragedy of the commons results in overuse of the resource; the tragedy of the anticommons results in underuse.
  • In order to cope with the tragedy of the anticommons, we should carefully investigate the opportunity of  the commons. The late Nobelist Elinor Ostrom made a career of studying how communities manage shared resources without property rights. With appropriate self-governance institutions, Ostrom found again and again that a commons does not inevitably lead to tragedy—indeed, open access to shared resources can provide collective benefits that are not available under other forms of property management.
  • This suggests that—litigation costs aside—patent law could be reducing the stock of ideas rather than expanding it at current margins.
  • Advocates of extensive patent protection frequently treat the commons as a kind of wasteland. But considering the problems in our patent system, it is worth looking again at the role of well-tailored limits to property rights in some contexts. Just as we all benefit from real property rights that no longer extend to the highest heavens, we would also benefit if the scope of patent protection were more narrowly drawn.
  • Reforming the Patent System
  • This analysis raises some obvious possibilities for reforming the patent system. Diane Wood, Chief Judge of the 7th Circuit, has proposed ending the Federal Circuit’s exclusive jurisdiction over patent appeals—instead, the Federal Circuit could share jurisdiction with the other circuit courts. While this is a constructive suggestion, it still leaves the door open to the Federal Circuit playing “a leading role in shaping patent law,” which is the reason for its capture by patent interests. It would be better instead simply to abolish the Federal Circuit and return to the pre-1982 system, in which patents received no special treatment in appeals. This leaves open the possibility of circuit splits, which the creation of the Federal Circuit was designed to mitigate, but there are worse problems than circuit splits, and we now have them.
  • Another helpful reform would be for Congress to limit the scope of patentable subject matter via statute. New Zealand has done just that, declaring that software is “not an invention” to get around WTO obligations to respect intellectual property. Congress should do the same with respect to both software and business methods.
  • Finally, even if the above reforms were adopted, there would still be a need to address the asymmetries in patent litigation that result in predatory “troll” lawsuits. While the holding in Alice v. CLS arguably makes a wide swath of patents invalid, those patents could still be used in troll lawsuits because a ruling of invalidity for each individual patent might not occur until late in a trial. Current legislation in Congress addresses this class of problem by mandating disclosures, shifting fees in the case of spurious lawsuits, and enabling a review of the patent’s validity before a trial commences.
  • What matters for prosperity is not just property rights in the abstract, but good property-defining institutions. Without reform, our patent system will continue to favor special interests and forestall economic growth.
  • Gary Edwards on 13 Sep 14
     
    "Libertarians intuitively understand the case for patents: just as other property rights internalize the social benefits of improvements to land, automobile maintenance, or business investment, patents incentivize the creation of new inventions, which might otherwise be undersupplied. So far, so good. But it is important to recognize that the laws that govern property, intellectual or otherwise, do not arise out of thin air. Rather, our political institutions, with all their virtues and foibles, determine the contours of property-the exact bundle of rights that property holders possess, their extent, and their limitations. Outlining efficient property laws is not a trivial problem. The optimal contours of property are neither immutable nor knowable a priori. For example, in 1946, the U.S. Supreme Court reversed the age-old common law doctrine that extended real property rights to the heavens without limit. The advent of air travel made such extensive property rights no longer practicable-airlines would have had to cobble together a patchwork of easements, acre by acre, for every corridor through which they flew, and they would have opened themselves up to lawsuits every time their planes deviated from the expected path. The Court rightly abridged property rights in light of these empirical realities. In defining the limits of patent rights, our political institutions have gotten an analogous question badly wrong. A single, politically captured circuit court with exclusive jurisdiction over patent appeals has consistently expanded the scope of patentable subject matter. This expansion has resulted in an explosion of both patents and patent litigation, with destructive consequences. "
  • Paul Merrell on 14 Sep 14
     
    I added a comment to the page's article. Patents are antithetical to the precepts of Libertarianism and do not involve Natural Law rights. But I agree with the author that the Court of Appeals for the Federal Circuit should be abolished. It's a failed experiment.
Paul Merrell

Civil society organisations say no to intellectual property in EU - US trade agreement ... - 0 views

press.ffii.org/...U%20-%20US%20trade%20agreement

internet freedom trade agreements

shared by Paul Merrell on 18 Mar 13 - No Cached
  • Brussels, 18 March 2013 -- More than 35 European and United States civil society organisations insist that a proposed trade agreement between the EU and the US exclude any provisions related to patents, copyright, trademarks, or other forms of so-called "intellectual property". Such provisions could impede citizens' rights to health, culture, and free expression and otherwise affect their daily lives.
  • The civil society organisations also insist that the EU and US will release the negotiating texts of the trade agreement they intend to negotiate. They believe that secretive "trade" negotiations are absolutely unacceptable forums for devising binding rules that change national non-trade laws.
  • We, the undersigned, are internet freedom and public health groups, activists, and other public interest leaders dedicated to the rights of all people to access cultural and educational resources and affordable medicines, to enjoy a free and open internet, and to benefit from open and needs-driven innovation. First, we insist that the European Union and United States release, in timely and ongoing fashion, any and all negotiating or pre-negotiation texts. We believe that secretive "trade" negotiations are absolutely unacceptable forums for devising binding rules that change national non-trade laws. Second, we insist that the proposed TAFTA exclude any provisions related to patents, copyright, trademarks, data protection, geographical indications, or other forms of so-called "intellectual property". Such provisions could impede our rights to health, culture, and free expression and otherwise affect our daily lives.
  • ...1 more annotation...
  • Past trade agreements negotiated by the US and EU have significantly increased the privileges of multinational corporations at the expense of society in general. Provisions in these agreements can, among many other concerns, limit free speech, constrain access to educational materials such as textbooks and academic journals, and, in the case of medicines, raise healthcare costs and contribute to preventable suffering and death. Unless "intellectual property" is excluded from these talks, we fear that the outcome will be an agreement that inflicts the worst of both regimes’ rules on the other party. From a democratic perspective, we believe that important rules governing technology, health, and culture should be debated in the US Congress, the European Parliament, national parliaments, and other transparent forums where all stakeholders can be heard—not in closed negotiations that give privileged access to corporate insiders. The TAFTA negotiations must not lead to a rewriting of patent and copyright rules in a way that tilts the balance even further away from the interests of citizens.
Gonzalo San Gil, PhD.

Here's why patents are innovation's worst enemy | Vivek Wadhwa | LinkedIn - 1 views

www.linkedin.com/...tions-worst-enemy-vivek-wadhwa

patents innovation worst enemy linkedin

shared by Gonzalo San Gil, PhD. on 13 Mar 15 - No Cached
  • Gonzalo San Gil, PhD. on 13 Mar 15
     
    "The Founding Fathers of the United States considered intellectual property so important that they gave it a special place in the Constitution: "To promote the progress of science and useful arts, by securing for limited times to authors and inventors the exclusive right to their respective writings and discoveries.""
  • Gonzalo San Gil, PhD. on 13 Mar 15
     
    "The Founding Fathers of the United States considered intellectual property so important that they gave it a special place in the Constitution: "To promote the progress of science and useful arts, by securing for limited times to authors and inventors the exclusive right to their respective writings and discoveries.""
  • Paul Merrell on 13 Mar 15
     
    The quote is somewhat misleading because it is out of context. The section is preceded by: "The Congress shall have Power ..." Those are words of discretion, not commandment. Nothing in the Constitution *requires* that patent and copyright systems be established. "Stable ownership is the gift of social law, and is given late in the progress of society. It would be curious then, if an idea, the fugitive fermentation of an individual brain, could, of natural right, be claimed in exclusive and stable property. If nature has made any one thing less susceptible than all others of exclusive property, it is the action of the thinking power called an idea, which an individual may exclusively possess as long as he keeps it to himself; but the moment it is divulged, it forces itself into the possession of every one, and the receiver cannot dispossess himself of it. Its peculiar character, too, is that no one possesses the less, because every other possesses the whole of it. He who receives an idea from me, receives instruction himself without lessening mine; as he who lights his taper at mine, receives light without darkening me. That ideas should freely spread from one to another over the globe, for the moral and mutual instruction of man, and improvement of his condition, seems to have been peculiarly and benevolently designed by nature, when she made them, like fire, expansible over all space, without lessening their density in any point, and like the air in which we breathe, move, and have our physical being, incapable of confinement or exclusive appropriation. Inventions then cannot, in nature, be a subject of property. Society may give an exclusive right to the profits arising from them, as an encouragement to men to pursue ideas which may produce utility, *but this may or may not be done, according to the will and convenience of the society, without claim or complaint from any body."* VI Writings of Thomas Jefferson, at 180-181 (Washington ed.).
Gonzalo San Gil, PhD.

Huge Artists Coalition Piles Pressure on Congress Over DMCA - TorrentFreak [# ! Note] - 0 views

torrentfreak.com/e-on-congress-over-dmca-160621

artists coalition piles pressure congress against DMCA nobody happy with 1998 copyright enforcement landscape environment Intellectual Property bad

shared by Gonzalo San Gil, PhD. on 22 Jun 16 - No Cached
  • Gonzalo San Gil, PhD. on 22 Jun 16
     
    " Andy on June 21, 2016 C: 132 Breaking A coalition of 186 artists, bands and songwriters have penned an open letter to Congress complaining about the ineffectiveness of the DMCA. From Taylor Swift, Trent Reznor, deadmau5 and U2, to Sirs Paul McCartney and Elton John, the message is clear: The DMCA allows tech companies to make huge profits while artists and creators suffer."
Paul Merrell

» Obama Signs Global Internet Treaty Worse Than SOPA Alex Jones' Infowars: Th... - 2 views

www.infowars.com/nternet-treaty-worse-than-sopa

ACTA Obama OpenWeb SOPA constitutional law law

shared by Paul Merrell on 26 Jan 12 - No Cached
  • Months before the debate about Internet censorship raged as SOPA and PIPA dominated the concerns of web users, President Obama signed an international treaty that would allow companies in China or any other country in the world to demand ISPs remove web content in the US with no legal oversight whatsoever.
  • The White House has circumvented the necessity to have the treaty confirmed by lawmakers by presenting it an as “executive agreement,” although legal scholars have highlighted the dubious nature of this characterization.
  • In presenting ACTA as an “international agreement” rather than a treaty, the Obama administration managed to circumvent the legislative process and avoid having to get Senate approval, a method questioned by Senator Wyden. “That said, even if Obama has declared ACTA an executive agreement (while those in Europe insist that it’s a binding treaty), there is a very real Constitutional question here: can it actually be an executive agreement?” asks TechDirt. “The law is clear that the only things that can be covered by executive agreements are things that involve items that are solely under the President’s mandate. That is, you can’t sign an executive agreement that impacts the things Congress has control over. But here’s the thing: intellectual property, in Article 1, Section 8 of the Constitution, is an issue given to Congress, not the President. Thus, there’s a pretty strong argument that the president legally cannot sign any intellectual property agreements as an executive agreement and, instead, must submit them to the Senate.”
Paul Merrell

Join The Internet Vote - 0 views

www.battleforthenet.com/internetvote

internet-freedom TPP fast-track legislation

shared by Paul Merrell on 10 Apr 15 - No Cached
  • Congress is about to introduce a bill to fast track a secret deal that could lead to global censorship. It’s called the Trans-Pacific Partnership (TPP). We think Internet users everywhere should have a say in decisions that affect the Internet — but if “Fast Track” legislation passes, there is no chance that the public will see the text before the deal is approved. Join the Internet Vote on April 23rd and let’s make it clear to DC how we’re voting: against Fast Track and against Internet censorship. (Learn More)
  • Paul Merrell on 10 Apr 15
     
    Sign up (email address) for updates on a monumental lobbying effort coming up in the next few days when Congress comes back into session and the legislation to "Fast Track" the TPP *and all future trade agrerements* is introduced. From leaked draft portions, we know that the TPP brings us internet censorship and a mass of copyright law changes that have the giant intellectual property corproate folk drooling at the mouth, because they helped write it while the public was excluded. This is your chance to help end secret trade agreements that the public doesn't even get to see until they have already been made into law.
Gonzalo San Gil, PhD.

Sex Cams at NASA & Library of Congress, Anti-Piracy Outfit Says | TorrentFreak - 1 views

torrentfreak.com/anti-piracy-outfit-says-140527

cams nasa library congress outfit piracy anti-piracy says ridiculous policy intellectual property enforcement

shared by Gonzalo San Gil, PhD. on 28 May 14 - No Cached
  • Gonzalo San Gil, PhD. on 28 May 14
     
    " Andy on May 27, 2014 C: 27 Breaking An adult media company's hiring of an anti-piracy outfit to blitz the Internet for content infringing on its webcam copyrights has produced ridiculous results."
Paul Merrell

WikiLeaks - Secret Trans-Pacific Partnership Agreement (TPP) - Investment Chapter - 0 views

wikileaks.org/...press.html

TTP-Investment-Chapter Wilileaks globalization corporatization

shared by Paul Merrell on 27 Mar 15 - No Cached
  • WikiLeaks releases today the "Investment Chapter" from the secret negotiations of the TPP (Trans-Pacific Partnership) agreement. The document adds to the previous WikiLeaks publications of the chapters for Intellectual Property Rights (November 2013) and the Environment (January 2014). The TPP Investment Chapter, published today, is dated 20 January 2015. The document is classified and supposed to be kept secret for four years after the entry into force of the TPP agreement or, if no agreement is reached, for four years from the close of the negotiations. Julian Assange, WikiLeaks editor said: "The TPP has developed in secret an unaccountable supranational court for multinationals to sue states. This system is a challenge to parliamentary and judicial sovereignty. Similar tribunals have already been shown to chill the adoption of sane environmental protection, public health and public transport policies." Current TPP negotiation member states are the United States, Japan, Mexico, Canada, Australia, Malaysia, Chile, Singapore, Peru, Vietnam, New Zealand and Brunei. The TPP is the largest economic treaty in history, including countries that represent more than 40 per cent of the world´s GDP.
  • The Investment Chapter highlights the intent of the TPP negotiating parties, led by the United States, to increase the power of global corporations by creating a supra-national court, or tribunal, where foreign firms can "sue" states and obtain taxpayer compensation for "expected future profits". These investor-state dispute settlement (ISDS) tribunals are designed to overrule the national court systems. ISDS tribunals introduce a mechanism by which multinational corporations can force governments to pay compensation if the tribunal states that a country's laws or policies affect the company's claimed future profits. In return, states hope that multinationals will invest more. Similar mechanisms have already been used. For example, US tobacco company Phillip Morris used one such tribunal to sue Australia (June 2011 – ongoing) for mandating plain packaging of tobacco products on public health grounds; and by the oil giant Chevron against Ecuador in an attempt to evade a multi-billion-dollar compensation ruling for polluting the environment. The threat of future lawsuits chilled environmental and other legislation in Canada after it was sued by pesticide companies in 2008/9. ISDS tribunals are often held in secret, have no appeal mechanism, do not subordinate themselves to human rights laws or the public interest, and have few means by which other affected parties can make representations. The TPP negotiations have been ongoing in secrecy for five years and are now in their final stages. In the United States the Obama administration plans to "fast-track" the treaty through Congress without the ability of elected officials to discuss or vote on individual measures. This has met growing opposition as a result of increased public scrutiny following WikiLeaks' earlier releases of documents from the negotiations.
  • The TPP is set to be the forerunner to an equally secret agreement between the US and EU, the TTIP (Transatlantic Trade and Investment Partnership). Negotiations for the TTIP were initiated by the Obama administration in January 2013. Combined, the TPP and TTIP will cover more than 60 per cent of global GDP. The third treaty of the same kind, also negotiated in secrecy is TISA, on trade in services, including the financial and health sectors. It covers 50 countries, including the US and all EU countries. WikiLeaks released the secret draft text of the TISA's financial annex in June 2014. All these agreements on so-called “free trade” are negotiated outside the World Trade Organization's (WTO) framework. Conspicuously absent from the countries involved in these agreements are the BRICs countries of Brazil, Russia, India and China. Read the Secret Trans-Pacific Partnership Agreement (TPP) - Investment chapter
  • Paul Merrell on 27 Mar 15
     
    The previously leaked chapter on copyrights makes clear that the TPP would be a disaster for a knowledge society. This chapter makes clear that only corprorations may compel arbitration; there is no corresponding right for human beings to do so. 
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