Last weekend Mark Helprin published an op-ed piece in the New York Times that essentially argued that copyrights should exist in perpetuity. The essence of his argument is that if he writes something, his descendants for all time should be able to earn a living off of that. That’s kind of like saying that my current employer should continue paying my children and grandchildren and great grandchildren ad infinitum for the work I do now. This is an absurd argument on the face of it and Helprin comes across as a fool for even putting the idea forward. Today Techdirt has a wonderfully articulate rebuttal of Helprin’s idea starting from an explanation of the difference between physical and intellectual property.

The purpose of property is to better manage the allocation of scarce resources. Since the resource is limited and not everyone can have it, property rights and property law make complete sense for a civilized society, allowing those with rights to the property to buy, sell and exchange their property. This allows for resources to be efficiently allocated through commerce and the laws of supply and demand. It’s a sensible system for the best allocation of scarce resources. However, when it comes to infinite resources, there’s simply no need to worry about efficient allocation — since anyone can have a copy.

Perhaps what we need to do to make some progress in this whole discussion is to change the terminology to words that are more accurately represent what we are talking about. The whole term intellectual property should be discarded immediately in favor of Ideas. Once we are talking about Ideas the tone of the argument changes. When a company like HBO or Disney starts talking about getting a perpetual monopoly (and a copyright or patent is a government granted monopoly) on an Idea, it might start getting average people’s attention so that they stand up and say NO MORE! Check out the rest of Techdirt’s article here.

I’ve written here multiple times about screwed up the intellectual property system is in the United States. Particularly since a U.S. Appeals court decided in 1998 that business methods could be patented, the system has completely broken down. The very premise that a business method is an invention is so utterly stupid that any judge that would actually decide such a thing is clearly either too corrupt or too stupid to be on the bench. Every year the system just gets worse, and the cost to society increases.

The latest ridiculous abuse of the system comes from tax attorneys and accountants. As tax laws have become increasingly complex, lawyers and accountants have had to come up with new ways to help their clients avoid paying their fair share. So those same lawyers have started getting patents on their tax strategies. The premise is insane! Now if people want to use a particular tax strategy they may have to either go the lawyer that holds the patent or potentially another one that has licensed the strategy. I don’t generally have any sympathy for people who have enough money to be able to afford these kinds of problems. However, this is yet another really bad patent precedent. If these kinds of things are allowed to continue along with things like patenting genes, who knows where it goes next?

It’s time to stop the abuse of the patent system. Business method patents, need to permanently banned and all existing method patents need to be invalidated. A database needs to be created for the filing of prior art. Procedures need to be implemented to allow people to challenge a patent application after the application is published if they are aware of prior art on the patent. Finally, patent examiners should be given more training in what the word obvious means! Something like swinging sideways should be granted a patent.

The other day I wrote about the Supreme Court dismissing an important patent infringement case without ruling on the merits of the case. This whole case got me thinking. I have been speaking to people for several years about the problems with the intellectual property system. To most people this seems to be an arcane subject that has no real bearing on their lives. After all they’re not inventors getting patents, or writers or film-makers or artists worried about copyright. But as technology advances, and more and more people write blogs, post there photos and videos on the web, and record podcasts these become real issues. My son Max recently started doing a music podcast called MewzikCast. I had to explain to him why he couldn’t play some of his favorite songs on his show. Big record companies pay millions of dollars a year to companies like Clear channel to get songs played on their radio stations. But if someone doing an independent podcast wants to play the same songs, there is no way to do it. And if you do, they will come after you. And the reality is that podcasts are helping to sell music.

However, another very real cost of this system is one that we all (at least in the United States, less so in more enlightened countries) have to pay every day. The vast majority of Americans are familiar with the skyrocketing cost of health insurance. After a brief respite in the the latter part of the 1990’s when HMOs started to catch on, the rate of inflation of health care coverage has been on a very steady climb for last 5-6 years. Probably the single biggest driver of this inflation is the cost of prescription drugs. One of the reasons for these costs is the patent system. When the pharmaceutical companies develop a drug, they patent it. This gives them a monopoly for a limited period of time for that drug. When you have a monopoly on a product you can charge whatever price you want. The premise of patents and copyrights as defined in the constitution is to promote progress by giving inventors and artists a period of limited monopoly in exchange for disclosing their discoveries and works publicly. In this way the creators get make some money from their works while ultimately the works pass into the public domain so that others can build on it. This premise is one of the contributors to the incredible technological and cultural advancement of the last two centuries. However, as these monopolies have helped to create fortunes, the fortunes have led some to do whatever they can to preserve the cash flow, without necessarily creating anything new or useful.

This has been manifested in several ways. In the entertainment industry, copyright holders (and not that these copy right holders are not necessarily the creative people but the holders of the copyright), there has been continued drives to extend the period of copyright, and greater restrictions on what can be done with copyrighted material. In the area of patents, patent holders have tried to tweak their patented products to get new or extended patent protection. They have also tried to get broader less specific patents. An example this would be a drug company developing a new treatment for some medical problem. After getting a patent and getting the drug on the market for some number of years, they develop a new variant with the same drug in a new form. For example, the drug may initially come in a tablet form. Then it is developed in a capsule form. Now having a drug in a capsule form may be an innovation in itself and patentable. However once this has been done, putting other drugs into this form is no longer innovative. Similarly developing extended release versions might also be patented, even though it really shouldn’t be. In this way pharmaceutical companies have manipulated the patent system in order keep drugs under their control. By keeping a patent in force on brand name drugs, they keep generic versions off the market.

If you have ever compared the prices of generic and brand name medications you know how huge this gap is. For example, I take loratadine which is sold under the brand name Claratin for my allergies. The brand name stuff sells in a box of 40 tablets for about $16 I bought a bottle of 120 at Target for $17 for the generic version. It is the exact same drug for 1/3 of the price. This example is available over the counter now, but similar comparisons apply to must prescription drugs. The pharmaceutical companies do everything they can to preserve their patent protection as long as they can. Other examples of abuse of the system are of the type by Metabolite to patent a basic chemical relationship. They get patents on overly broad or general ideas. Health care systems are then forced to pay exorbitant fees to conduct tests, or pay for medicine. This affects each and every one of us. If we can afford health insurance we end up paying much more. More people than ever cannot even afford insurance. For the rest of us we end up paying for all the un-insured either through the taxes we pay to support Medicaid or through the higher fees charged by hospital to cover the costs of the emergency care they have to provide to un-insured patients.

The patent system need to be fundamentally changed with the onus put on the applicants to demonstrate the true innovation of their “invention”. There should also be an open comment period after an application is published so that people can shoot holes in it and demonstrate prior art before a patent is granted. It needs to be easier to show that an idea is not valid for patenting before granting a patent. I will be discussing this last thought more in another post I am working on and will publish shortly.

Last year the US Supreme Court agreed to hear an appeal on a patent infringement case. This was a prime opportunity for the court to take a stand on rule on the limits of the fundamentally broken US patent system. For at least the last decade the USPTO (US patent and trademark office) has been granting patents on all kinds of obvious concepts seemingly without even reading the applications in most cases. They have issued such legendary patents as the sideways swinging patent and the Amazon One-click patent. This term the Supreme Court agreed to hear a patent infringement case involving Metabolite Laboratories Inc patent on the relationship between homocysteine levels in the blood and vitamin B12 levels. Metabolite had sued Laboratory Corporation of America (where do they come up with these brilliant names anyway?) for infringement. LabCorp had claimed that the patent was too broad and and did not actually cover any invention. Metabolite had determined that there was a correlation between B12 levels (which are difficult to measure directly) and homocysteine levels which are relatively easy to measure. They were essentially granted a patent for determining that A is proportional to B and if A goes up or down so does B. For some ridiculous reason two lower courts had sided with Metabolite and agreed that LabCorp was infringing but evidently didn’t look at the actual validity of the patent.

The court agreed to hear the case last fall just after John Roberts joined. Apparently the Bush Administration didn’t want this case heard however, because they filed a brief asking that the case be rejected. As usual the court bowed to King George’s crew. Yesterday they issued a dismissal of the case stating only that they erred in taking the case without any further explanation. Roberts had recused himself apparently because his old law firm had been involved in the case. Justice Stephen Bryer along with John Paul Stevens and David Souter wrote a strong dissent stating that the patent should have been invalidated.

Writing for the three dissenters, Justice Stephen Breyer said the patent amounted to “no more than an instruction to read some numbers in light of medical knowledge.”

Failing to decide on the merits of the case “threatens to leave the medical profession subject to the restrictions imposed by this individual patent and others of its kind,” Breyer wrote. He was joined by Justices John Paul Stevens and David Souter.

The court had a prime opportunity reign in the out of control patent system. They blew it big time. Just like the Pledge of allegiance case they dismissed it on a technicality. These are not trivial cases. The patent system can have a major impact on our economy. It affects how much people have to pay for things because a grants limited monopoly power to patent holders. Abuse of the patent system is one of the big reasons why prescription drug costs are so insanely high. Pharmaceutical companies keep making minor tweaks to their drug formulations without actually coming up with anything fundamentally new, just so they can extend their patent protection. This is one of the major drivers of skyrocketing health care costs in this country. Those health care costs in turn are one of the biggest pain points for American manufacturing companies, especially the automakers. This is one of the things that is driving all manufacturing to other countries and leaving us with low paying, low benefit jobs at places like Wal-Mart. Lets hope another patent case comes before the court soon and they actually address it next time.

JPEG is the image compression standard that is used in almost all digital cameras, scanners and across the web. It is a very efficient format and provides high levels of compression and with high quality. The format is approved by the international standards organization. Today the US Patent and Trademark Office invalidated the main parts of the JPEG patent held by Forgent Networks. Forgent did not create the ideas involved in the patent. They bought company that owned the patent in 1997. In 2002 when their main business wasn’t doing much they decided to try and make some money off this patent. They sued several dozen companies for infringement including Kodak, Dell, Apple and Sony. They reached settlements for a bunch of companies and collected over $90 million. However, the Public Patent Foundation challenged the patent and produced a whole bunch of prior art. Prior art is evidence that the idea already existed before the patent was filed. If a concept is published then you cannot claim you invented something and get a patent. It was shown to the USPTO and the USPTO decided to reject the patent. Apparently Forgent even knew about this prior art before asserting their patent rights. So they knew the patent was invalid but tried to profit from it anyway. Good riddance to another patent troll.

Here is a question for all of you. If you have read any significant amount of my posts you may have already realized what I am about to say. I am very troubled by the concept of intellectual property. Two definitions that come from dictionary.com

intangible property that is the result of creativity (such as patents or trademarks or copyrights)

and

(IP) The ownership of ideas and control over the
tangible or virtual representation of those ideas. Use of
another person’s intellectual property may or may not involve
royalty payments or permission, but should always include
proper credit to the source.

The ownership of ideas is the part that bothers me the most. The whole concept is troubling. In a speech I heard by Lawrence Lessig he articulated a concept that resonates with me. If some has a tangible object like a camera, and another person takes it, the original possessor no longer has it and can no longer benefit from it. If one person has an idea and another person uses it, the first person still has the idea and can do what they want with it. The first person has not lost the benefit of that idea. They can still use the idea.

I’m not totally opposed to the idea of patents, because I think if someone comes up with a truly creative and original idea they should be able to make some money off that idea. But that should be based on a specific implementation of the idea. if someone comes up with a different or better way of doing the same thing they should be allowed to do that and compete. The basic idea should be open. That is what creates progress. People taking ideas and improving on them or coming up with better implementations. If someone cannot implement an idea they should not be given blanket monopoly control over a general concept. Even more importantly given the pace of technological development over the last few decades the length of any patent protection needs to be reduced not increased. I’m obviously rambling a bit here, but I’d like to know what other people think. Please comment on this post.

At the end of every year you always see the lists of top images and stories of the past year.  Here are a few of the images I am looking forward to seeing at the end of 2006:

-George W Bush being convicted at his impeachment trial

-Karl Rove’s perp walk and subsequent conviction in the Valerie Plame leak case

-Republicans loosing control of both houses of congress in November

-Tom Delay convicted on all charges in his corruption trial

-the final US troops returning from Iraq

-the RIAA announcing all file sharing lawsuits are dropped and previous settlements are refunded

-Record companies announcing they will never use DRM again and repudiating the DMCA

-prices of online music downloads being reduced to the point ($.20-$.25 per song) where file sharing of music becomes pointless except for old out of print recordings.

-More people listening to podcasts than Clear Channel radio stations

-The Thomas Moore Law center is disbanded and all intelligent design efforts are abandoned.

-Software and business model patents are ruled invalid and are permanently rejected

Clearly some of these items fall into the realm of fantasy (like the RIAA giving up on drm),  but some are definitely things that could happen this year.  What are some images or stories you would like to look back on come December 31 2006?