Category: IP

Good News Everyone!

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I invented a device that makes you read this in your head using my voice!

In response to yet another attempted shakedown by a patent troll, the courts,  in response to recent Supreme Court rulings, have started to issue significant sanctions:

This summer, the Supreme Court made it easier for defendants to collect fees when they win patent cases. The decision is starting to have an effect—the nation’s largest patent troll just got slapped with an order to pay $1.4 million in attorneys’ fees to NetApp, which it sued in 2010.

The case brought by Summit Data Systems, a branch of Acacia Research Corp., hinged on an accusation that NetApp infringed when its server-based software interacted with an end user on a Microsoft operating system. The two patents-in-suit, 7,392,291 and 7,428,581, relate to “block-level storage access over a computer network.”

But just two months before Summit filed its lawsuit, it sold licenses for those patents to 43 companies that were member companies of defensive patent aggregator RPX—including Microsoft.

“Nonetheless, Summit brought suit against NetApp barely two months after executing the Licensing Agreement,” wrote US District Judge Gregory Sleet in his order (PDF), which was unsealed on Tuesday. “It then took Summit 18 months to disclose the existence of the Licensing Agreement to NetApp.”

Summit’s expert said that Microsoft users infringe the patents, but he couldn’t determine whether Linux or UNIX systems infringed because he “didn’t have time.”

Sleet continued:

The facts of this case demonstrate that Summit pursued an action against NetApp without any basis for infringement, delayed disclosing the existence of the Licensing Agreement for eighteen months, extracted settlements from co-defendants worth a fraction of what it would actually cost them to defend the lawsuit, and then voluntarily dismissed its claims with prejudice prior to the court issuing a ruling on the merits… The claims were frivolous—Microsoft’s initiator software [was] licensed, so no system employing it could infringe the asserted patents. Summit’s motivation was to extract quick settlements that were dwarfed by the costs to litigate. Summit was objectively unreasonable in bringing a lawsuit against NetApp mere months after executing the Licensing Agreement that effectively eliminated its theory of infringement. Finally, the court is convinced that an award of attorneys’ fees in this case is necessary to deter this sort of reckless and wasteful litigation in the future.

………

Acacia is a patent-holding company that’s publicly traded on NASDAQ, and it’s sometimes considered the largest “patent troll,” since its various subsidiaries have filed more patent lawsuits than any other single company. The NetApp fee order is Acacia’s second major setback in recent months. In July, an Acacia unit holding an old Polaroid digital imaging patent lost a big case in which it was seeking royalty payments from 31 companies.

Here is the pertinent bit about the recent Supreme Court decision:

The Supreme Court overruled the lower courts. In their unanimous opinion for Octane Fitness v. Icon Health & Fitness, the justices found the Federal Circuit had taken a wrong turn in 2005 when it rejected the “holistic, equitable” approach toward attorneys’ fees and took up a “more rigid and mechanical formulation.” In order to get fees in a case, a party had to show that a litigation is both “objectively baseless” and “brought in subjective bad faith.”

That’s almost an impossible standard to meet, Octane’s lawyer Rudy Telscher told Ars in an interview before the February oral arguments. “You’ve got to show that the plaintiff brought a ‘zero merit’ case, and they knew that’s what they were doing.”

Instead, the Supremes said today that fees should be awarded in an “exceptional” case. That’s what the statute calls for, and the word “exceptional” should be given its ordinary meaning. “An ‘exceptional’ case is simply one that stands out from others with respect to the substantive strength of a party’s litigating position… or the unreasonable manner in which the case was litigated,” wrote Sotomayor.

The “Federal Circuit Court” above is formally known as the United States Court of Appeals for the Federal Circuit, but is probably better known as the “Patent Court,” which has had a ridiculously broad view of IP rights, they have literally allowed the patenting of a rainy day.

Thankfully, SCOTUS has begun routinely overturning the more extreme rulings of the patent court.

Finally!

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The FTC is suing brand name drug makers over their payments to generic drug manufacturers to delay their production:

For the first time since the U.S. Supreme Court ruled last year that so-called pay-to-delay deals may be subject to greater antitrust scrutiny, the U.S. Federal Trade Commission has filed a lawsuit charging drug makers with violating anti-trust laws and hurting consumers in their collective pocketbooks.

Specifically, the agency charged several drug makers – including AbbVie ; Abbott Laboratories , which spun off AbbVie, and Teva Pharmaceuticals – for striking deals that delayed the availability of the widely promoted AndroGel testosterone replacement therapy, a $1 billion seller.

“We believe the defendants’ anticompetitive conduct has forced consumers to overpay hundreds of millions of dollars for this medication,” FTC chairwoman Edith Ramirez told the media in a briefing, in which she noted the agency hopes to force the drug makers to disgorge “their ill-gotten gains.”

In these deals, a brand-name drug maker settles with a generic rival in exchange for ending patent litigation and launching a copycat medicine at a future date. The pharmaceutical industry contends the deals are not only legal, but actually allow drugs to reach consumers faster than if litigation continued.

Also known as reverse payment settlements, the deals emerged as an unintended consequence of the Hatch-Waxman Act that was designed to accelerate access to lower-cost generics. An FTC report in 2012 found there 40 potential pay-to-deals, up from 28 the year before.

The Supreme Court ruling, which reviewed a lawsuit brought by the FTC against Actavis, was a boost to the agency, because it supported the contention that pay-to-delay deals may violate antitrust laws and, effectively, allowed the FTC to pursue lawsuits against drug makers.

………

In its lawsuit, the FTC charges that AbbVie, Abbott and Bevins Healthcare filed “sham” patent litigation against potential generic rivals, including Teva, and then entered into an allegedly illegal patent settlement in order to thwart competition.

I’ve said it before (like the post just before this one):  Our current model of capitalism is a harmful and corrupt system that resembles nothing more than the book Lord of the Flies.

When the Supreme Court Gets it Right ………

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In this case, it is patents, where the Supreme Court ruling in  Alice v. CLS Bank has created a new legal landscape, which has seen regular reversals of “do it on a computer” patents:

The Supreme Court’s June ruling on the patentability of software — its first in 33 years — raised as many questions as it answered. One specific software patent went down in flames in the case of Alice v. CLS Bank, but the abstract reasoning of the decision didn’t provide much clarity on which other patents might be in danger.

Now a series of decisions from lower courts is starting to bring the ruling’s practical consequences into focus. And the results have been ugly for fans of software patents. By my count there have been 11 court rulings on the patentability of software since the Supreme Court’s decision — including six that were decided this month. Every single one of them has led to the patent being invalidated. 

This doesn’t necessarily mean that all software patents are in danger — these are mostly patents that are particularly vulnerable to challenge under the new Alice precedent. But it does mean that the pendulum of patent law is now clearly swinging in an anti-patent direction. Every time a patent gets invalidated, it strengthens the bargaining position of every defendant facing a lawsuit from a patent troll.

Until the supreme court slapped down the patent court, it had been routing for people to get patents for existing processes by adding, “We are doing it through the internet,” as the magic words.

Not any more.

A typical patent being overturned was, “A patent on the concept of using a computer to help users plan meals while achieving dieting goals.”

Because using a notebook to diet is so completely unlike using a computer, I guess.

In any case, it’s nice to see the patent trolls on the wrong side of this trend.

I Think that I Invoked George Orwell Prematurely

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Cartoon courtesy, XKCD

It appears that web based practice tests have license agreements that forbid you from remembering them: (all emphasis original)

Today’s copyright-induced stupidity is brought to you by… a whole host of regulatory institutions. An anonymous Techdirt reader sent in a pointer to this ridiculous warning that greets those accessing the National Association of Legal Assistants practice tests. (Press “Sign In” to view the legal threats pop-up.)

These online practice tests and all items contained herein are protected by federal copyright law. No part of this examination may be copied, reproduced or shared in any manner, in part or whole, by any means whatsoever, including memorization or electronic transmission.

While I realize there have been several attempts to broaden the coverage of copyright and extend its length towards the far end of perpetuity, I was unaware that federal copyright law now provides remedies for the creation of infringing memories.

This would be merely inane (but still noteworthy), if this stupidity began and ended with the NALA’s stern warning. But a search for that wording finds examples elsewhere.

Yeah, it ain’t just them. It’s the National Board of Chiropractic Examiners, the American Board of Perianesthesia Nursing Certification, the Texas Pharmacy Technician Certification Board, the American Association of Veterinary State Boards, the Oncology Nursing Certification Corporation, and the National Commission for Health Education Credentialing, Inc.

But the one that takes the cake is the Michigan State University, which actually forbids studying:

The examination and the items contained therein are protected by copyright law. No part of this examination may be copied or reproduced in part or whole by any means whatsoever, including memorization, note-taking, or electronic transmission.

Yep, a university has terms that ban studying.

Make the madness stop.

Cell Phone Unlocking Legal Again

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Following on the Senate’s lead, the House has passed a bill re-legalizing the abilities of consumers to unlock cell phones:

This afternoon, the House passed S. 517, the Unlocking Consumer Choice and Wireless Competition Act, under unanimous consent. The bill allows consumers to “unlock” their cell phones so they can take a phone with them from one service provider to another. The bill already passed in the Senate, and will now make its way to the President’s desk for signing.

 The following can be attributed to Laura Moy, Staff Attorney at Public Knowledge:

“This important legislation responds to hundreds of thousands of Americans who signed petitions, called, and wrote to government leaders asking for the right to unlock devices they legally own.

 “We are particularly grateful to Mr. Goodlatte, Mr. Conyers, and Ms. Lofgren for their work on this important issue and their willingness to find a compromise that works for their constituencies, as well as for the wireless industry and public interest groups like ours.

 “This bill ensures that consumers will be able to do what they rightfully expect to be able to do with phones they have purchased: use them on whatever network they like. It protects consumers who unlock their devices from possible criminal and civil liability under an overreaching copyright law known as the Digital Millennium Copyright Act (DMCA), which was designed to protect copyright but has had enormous unintended consequences.

“Not only will this legislation deliver on consumers’ expectations that they can use devices they own the way they see fit, but it will have other positive effects as well. It will make it easier for consumers to switch from one provider to another, improving competition in the wireless market; it will improve the availability of free and low-cost secondhand phones for consumers who cannot afford to purchase new devices; and it will keep millions of devices out of landfills.

 “This is also an important first step toward reforming the DMCA, which goes far beyond its original intent to protect copyright. Ms. Lofgren has introduced a bill that would go beyond phone unlocking to allow Americans to break any digital lock as long as they’re not violating copyright. This could apply to consumer products that all Americans use, ranging from cars to tractors to hearing aids. We hope the House will take up the Lofgren bill soon.”

The Library of Congress decided that unlocking cell phones should become illegal under the DMCA, and people’s heads exploded, because they were being told that they could not unlock cell phones that THEY owned.

BTW, the Lofgren bill that is mentioned would change Section 1201 of the DMCA by making it it only applies to attempted piracy, and not to people doing things unlocking their own phone:

New legislation sponsored by Zoe Lofgren (D-CA), Thomas Massie (R-KY), Anna Eshoo (D-CA), and Jared Polis (D-CO) takes a broader approach to the issue. In addition to explicitly legalizing cell phone unlocking, the Unlocking Technology Act of 2013 also modifies the DMCA to make clear that unlocking copy-protected content is only illegal if it’s done in order to “facilitate the infringement of a copyright.” If a circumvention technology is “primarily designed or produced for the purpose of facilitating noninfringing uses,” that would not be a violation of copyright.

 For example, Lofgren’s bill would likely make it legal for consumers to rip DVDs for personal use in much the same way they’ve long ripped CDs. It would remove legal impediments to making versions of copyrighted works that are accessible to blind users. And it would ensure that car owners have the freedom to service their vehicles without running afoul of copyright law.

Here is hoping that the rent seekers of the IP debate don’t win.

Meanwhile, Some Good News on the IP Front

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The estate of Arthur Conan Doyle has been claiming that, even though most of the Sherlock Holmes stories are out of copyright, a few are old enough to fall under the Mickey Mouse copyright extensions,* so the whole character falls under copyright.

The appellate court ruled against them and now the Supreme Court has denied cert, effectively ending the case in favor of the public domain:

Supreme Court Justice Elena Kagan refused on Thursday afternoon to block a federal appeals court ruling against continued copyright protection for fictional detective Sherlock Holmes, for any stories about him that have entered the public domain. Kagan acted without even asking for a response from an author who is preparing a new Holmes anthology, and she gave no explanation for her denial of a stay.

The nickel tour of the original case is here:

The estate has been attempting to block a California lawyer and Holmes fancier, Leslie S. Klinger, from publishing a new book about the two characters unless he is willing to get a license from the estate and pay a fee. The U.S. Court of Appeals for the Seventh Circuit rejected the estate’s copyright claim, calling it “quixotic.” The new filing at the Court, including the Seventh Circuit’s ruling as an appendix, has been docketed as 14A47, and can be read here.

 ………

 Doyle has been dead for eighty-four years, but because of extensions of copyright terms, ten of his fifty-six short stories continue to be protected from copying. All of the short stories and four novels were published between 1887 and 1927, but all of the collection except ten short stories have entered into the public domain as copyrights expired.

 The Doyle estate, though, is pressing a quite unusual copyright theory. It contends that, since Doyle continued to develop the characters of Holmes and Watson throughout all of the stories, the characters themselves cannot be copied even for what Doyle wrote about them in the works that are now part of the public domain and thus ordinarily would be fair game for use by others.

It’s nice that cockamamie IP theories are no longer getting judicial deference.

*I mean that literally. Disney has been vociferous in lobbying for copyright extensions to ensure that the first Mickey Mouse cartoon, Steamboat Willie, remain out of the public domain.

I Think that the Worm is Turning on IP

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Ten years ago, 90% of the population did not know what a patent troll was, and now popular effort sinks the nomination of a patent troll supporter to run the USPTO:

The Obama Administration has changed its mind over a plan to name pharmaceutical executive Phil Johnson as head of the U.S. Patent and Trademark Office, according to multiple sources. The reversal is a victory for the technology industry and other proponents of patent reform.

The plan to appoint Johnson surfaced in late June, and was met with outrage on social media, where critics claimed the choice reflected hypocrisy on the part of President Obama, who had called for fixes to the patent system in his January State of the Union address.

Johnson, a longtime attorney for Johnson & Johnson, was a controversial nominee in part because he helped lead opposition to a bipartisan bill, which died in May, that would have made it easier for companies to challenge bad patents and to seek legal fees from so-called “patent trolls.” He has also publicly scorned previous attempts to reform the patent system.

News of the White House’s decision to backtrack on the appointment came via a person close to the Administration, and was confirmed by several industry sources. The final decision to pull the plug may have occurred after Senator Chuck Schumer (D-NY) vocally declared his opposition to Johnson. Schumer, who was one of the authors of the failed reform bill, has regularly blasted the harm the current patent system is inflicting on start-ups and young companies.

It would have literally inconceivable that someone like Johnson would have been shot down by a bunch of people objecting to the legal fine points of the purpose of IP.

While IP protections have their place, are a form of rent seeking, and for a just and prosperous society, it behooves us to minimize the level of rent seeking to the absolute minimum level to encourage artistic and technological production (Article I, Section 8, Clause 8 of the United States Constitution).

This is baby steps, but if it is the start of a trend, it constitute a seismic shift from the (completely ahistorical, United States industry was built on IP appropriation) view that ever more expansive protections to IP are essential to economic well being.

Now if only we can convince the US Trade Rep to chill out.

I Guess that Steve Jobs is Really Dead

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Apple and Google have agreed to drop the patent suits that they have filed against each other:

Two giants of the mobile phone industry, Apple and Google, have agreed to drop all current patent infringement lawsuits between them, they said Friday.

“Apple and Google have also agreed to work together in some areas of patent reform,” the companies said in a joint statement. They have not agreed to cross-license each other’s patents, however.

Apple filed a lawsuit with the U.S. International Trade Commission in 2010 against Motorola Mobility, which was subsequently acquired by Google. Google has since agreed to sell the smartphone business to Lenovo, but the deal has not yet closed.

Many of the lawsuits Apple has filed against other smartphone makers, including Samsung, involve Google’s Android operating system. This deal announced Friday does not affect the Apple-Samsung lawsuit, however.

It’s a limited state step, but it is one that Steve Jobs would have taken.

Reasonable and measured was simply not a part of his DNA.

The Federal Circuit Court of Appeal F%$#s Up Again

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In Oracle vs. Google, the Federal Circuit Court of Appeal, aka the “Patent Court”, has once again taken a delusionally extremist position on IP, and ruled that software APIs are subject to copyright. As Timothy B. Lee observes, “The court that created the patent troll mess is screwing up copyright too.”

A few years ago, the database company Oracle sued Google, arguing that Google’s Android operating system infringed the copyright of Oracle’s Java technology. On Friday, a federal appeals court sided with Oracle in the long-running dispute.
The decision seems to reflect a fundamental lack of understanding of how software works. And it could create serious headaches for companies that want to make their software compatible with that of competitors.

Why did Oracle sue Google?

The lawsuit focuses on technical decisions Google made when it created the Android operating system.

 Google wanted people who wrote programs in the popular programming language Java to be able to re-use their code in Android apps. To do that, Google had to ensure that Java code written for other purposes ran exactly the same on Android. But negotiations with the company behind Java, Sun Microsystems (which was later acquired by Oracle), broke down, so Google decided to create its own version of Java from scratch.

 ………

 The trial court judge, William Alsup, sided with Google. Copyright only protects the creative aspects of a work, not its functional characteristics. Judge Alsup ruled that because the names of Java functions was essential to achieving interoperability, they were a functional characteristic rather than a creative aspect of Java, and using them wasn’t copyright infringement.

 But on Friday, the Federal Circuit Court of Appeals disagreed. The court was unimpressed with Google’s argument that function names were functional characteristics not protected by copyright. In the Federal Circuit’s view, the list of Java functions was just another kind of “code” that couldn’t be copied without its creator’s permission.

 The court’s reasoning didn’t impress James Grimmelmann, a copyright scholar at the University of Maryland. “Not only do they not understand how computers work, they can’t even read,” he says.

 ………

 The Federal Circuit is the court that hears appeals in all patent cases. Over the last three decades, it has shown a consistent bias in favor of patent holders, setting legal precedents that made the current patent troll problem possible.

 Ordinarily, copyright cases in California would be heard by the US Court of Appeals for the Ninth Circuit. But because Oracle’s fight with Google also includes some patent issues, the Federal Circuit gets jurisdiction.

 And evidently, the Federal Circuit has a bias toward copyright holders to go with its pro-patent bias.

Needless to say, the Federal Circuit Court of Appeals is completely insane, and should be abolished, and the judges on that court should be told to take up knitting.

Muck Fyhrvold

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Nathan Myhrvold founded Intellectual Ventures, and proceeded both directly, and through a shadowy shell companies, has proceeded to use dodgy patents, and threat of expensive litigation to extort money from businesses.

Well, we have just had a on the first case that IV put its own name on, and Myhrvold’s baby went down in flames:

Intellectual Ventures (IV) is the world’s biggest patent-licensing company and boasts of having collected tens of thousands of patents since it was founded in 2000. It’s raised about $6 billion from investors over the years, and to recoup that money, it started filing lawsuits over patents a few years ago. In 2013, it launched a new salvo, filing 13 lawsuits against major US banks, including Bank of America, JP Morgan Chase, and Capital One.

The Capital One case ended last Wednesday, when a Virginia federal judge threw out the two IV patents that remained in the case. It’s the first IV patent case seen through to a judgment, and it ended in a total loss for the patent-holding giant: both patents were invalidated, one on multiple grounds. (An IV case against Motorola went to a jury, but it ended in a mistrial, and no new trial has been scheduled.)

The case was just weeks away from a jury trial, but US District Judge Anthony Trenga didn’t let it get that far. In an opinion published Wednesday, Trenga found that IV’s patents were simply abstract ideas: “nothing more than the mere manipulation or reorganization of data,” he wrote. “At most, the patents describe a more efficient system or method for performing tasks than could be done without a computer, i.e. monitoring expenditures according to preset limits (the ‘137 Patent) or determining what would appeal to a particular user from a particular website (the ‘382 Patent.)”

Unfortunately, I can think of no way to make Myhrvold’s business model, and those of other patent trolls illegal (as in go to jail), but perhaps we can see some meaningful changes to the law to make this behavior legally untenable.

I hope that Monsanto’s in the crosshairs as well.  In many ways, they are worse, because, our lives do not depend on the CWV code on a credit card, but they do depend on food.

H/t Crooks and Liars.

Bobby Jindal is the Lamest Man in Louisiana

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A court just threw out his attempt to take down a MoveOn.org billboard using bogus trademark claims:

A U.S. district judge rejected Monday the Louisiana state government’s request that MoveOn.org’s billboard criticizing Gov. Bobby Jindal (R) for not expanding Medicaid under Obamacare be taken down. The billboard includes a parody of the state’s tourism slogan, which was the basis for the state’s legal action.

U.S. District Judge Shelly Dick issued the order. Lawyers for Lt. Gov. Jay Dardenne (R), who filed the suit, had “not demonstrated a substantial likelihood of prevailing on its burden of proving confusion by viewers of the billboard,” Dick wrote. She rejected the state’s request for a preliminary injunction, which asked that the billboard be taken down as the court case continues.

“The State has failed to demonstrate a compelling reason to curtail MoveOn.org.’s political speech in favor of protecting of the State’s service mark,” she continued. “There has been no showing of irreparable injury to the State.”

And Jindal wants to be President.

I would think that he is too lame to be the Republican nominee, but considering the past 2 ‘Phant presidents, Bush and Bush, I am not sure if there is enough lame in the universe to rule out anyone as a Republican nominee.

On the other hand, I do think that a significant portion of the Republican electorate, particularly in the south, might be uncomfortable voting for a non-white candidate.

No Virginia, Trade Deals Do Not Require Draconian IP Restrictions

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Case in point, Canada and South Korea, who signed a free trade agreement without an all encompassing over-broad IP regime:

Canada and South Korea announced agreement on a comprehensive trade agreement earlier today. The focus is understandably on tariff issues, but the agreement also contains a full chapter on intellectual property (note that the governments have only released summaries of the agreement, not the full text, which is still being drafted). The IP chapter is significant for what it does not include. Unlike many other trade deals – particularly those involving the U.S., European Union, and Australia – the Canada-South Korea deal is content to leave domestic intellectual property rules largely untouched. The approach is to reaffirm the importance of intellectual property and ensure that both countries meet their international obligations, but not to use trade agreements as a backdoor mechanism to increase IP protections.
Yesterday I noted that Canada might be asked to increase the term of copyright protection given that South Korea had agreed to longer copyright terms in its recent agreements with the European Union, Australia, and the U.S. In fact, the U.S. agreement contains extensive additional side letters on Internet provider liability, enforcement, and online piracy.  The Canada – South Korea deal rejects that approach with copyright, trademark, patent, and enforcement rules that are all consistent with current Canadian law (plus the coming border measures provisions in Bill C-8). 
On copyright, the summary states the agreement:

  • reflects Canada’s regime as updated by the 2012 Copyright Modernization Act, which brought Canada into compliance with the World Intellectual Property Organization’s two Internet treaties;


  • reiterates existing aspects of Canada’s regime, including the protection of technological protection measures (technology designed to protect copyrighted material), protection of rights management information, and special measures against copyright infringers on the Internet (no change to Canada’s notice and notice regime, which defines the responsibility of Internet service providers in respect of copyrighted material on their networks).

The specific reference to notice-and-notice is important since it confirms no takedown requirements nor three-strikes rules. The specific measures against copyright infringers may be interpreted as Canada’s enabler provision that targets websites that facilitate infringement. Moreover, the references to reflecting Canada’s regime indicates that there is no copyright term extension or other substantive changes.

No copyright erxtensions.  No requirement that the other countries accept evergreening of drugs.

IP sanity.  What a concept.

H/t Slashdot.

The Supreme Court is to Take Up Software Patents

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I messed this in December, when the Supreme Court agreed to rule on the validity of software patents:

Renewing its recent fascination with the kinds of inventions that can be patented, the Supreme Court on Friday agreed to clarify when an analytical method implemented by a computer or by a link on the Internet is eligible for monopoly protection. This was the only new case granted. The Court will be reviewing a widely splintered decision by the U.S. Court of Appeals for the Federal Circuit, in the case of Alice Corporation Pty. Ltd. v. CLS Bank International (docket 13-298). The en banc Federal Circuit found the method at issue ineligible for a patent, but a majority could not agree on a standard for making such decisions.

 The case will provide a new test of the Patent Act’s most basic provision — Section 101, which broadly outlines what kinds of inventions are patentable. One of the long-standing exceptions to the types of inventions mentioned in that section is that an abstract idea can never be patented. That issue arises frequently these days, especially with rapidly developing technology in computer software. The Justices have dealt with that issue several times in recent years.

 Alice International, an Australian company that is half-owned by the National Australia Bank Ltd., obtained patent protection on a method invented by its founder, Ian Shepherd, for exchanging financial instruments, with the aim of assuring that, when two parties have agreed to an exchange of currency or other financial goods, they actually deliver on the deal. Because such agreements are often delayed at least a few days in implementation, there is a risk that one side won’t live up to the agreement. The invented program works out a settlement arrangement to determine which side is obliged to deliver. It generates instructions to the institutions involved to carry out their agreement.

Hopefully, this means that the Supreme Court is willing to overrule the U.S. Court of Appeals for the Federal Circuit, aka “The Patent Court”, which has ignored Supreme Court precedent for years:

This spring, the Supreme Court will weigh in on the patentability of software for the first time in a generation. In the 1970s, the high court placed strict rules on software-related patents. But since then, a lower court has effectively overruled the Supreme Court’s precedents, allowing hundreds of thousands of legally dubious software patents to be approved.

 The arguments in the software patent debate have barely changed since the 1970s, but the players in the debate have changed radically. In 1972, IBM was a leading software patent opponent. Today, Big Blue has become one of the concept’s biggest supporters. In 1991, Bill Gates warned that patents could bring the software industry to a “standstill.” Today, Microsoft is fighting to protect the tens of thousands of software patents in its portfolio.

 ………

 During the 1970s, patent law was shaped by a Supreme Court that was skeptical of patents on software. Even its 1981 decision [which allowed for a computer controlled method of curing rubber involving a computer to constantly monitor temperature] emphasized that there were limits on software-related patents. In 1982, Congress made a seemingly innocuous change to the structure of the court system that had a profound impact on the legal status of software patents.

 Most areas of the law are handled by generalist judges organized into a dozen geographically based appellate courts. But Congress, concerned that patent law had become too complex for generalist judges, created a new court called the Federal Circuit Appeals Court. The Federal Circuit was given jurisdiction over all patent appeals. And perhaps because its judges spend so much time rubbing elbows with patent attorneys, the new court would prove to have a strong pro-patent bias.

 An important turning point came in a 1994 ruling involving a computer graphics technique called anti-aliasing. ………

Anti-aliasing was a technique which had been known for decades, but the patent court ignored precedent, and allowed the patent, and opened up the floodgates, which later extended to business models and financial constructs.

I think that it is likely that SCOTUS will issue significant restrictions, because, ever since the Blackberry case, pretty the only time that they take up a case like this, it is to slap down the maniacs in the Patent Court.

They need to come down on this bullsh%$ hard, because the jokers in the U.S. Court of Appeals for the Federal Circuit are arrogant clueless extremists.

Capitalism, Huh?

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click a picture for a slide show

When Metallica discovered that their music was being used to torture inmates at Guantanamo, they send a cease and desist letter.

Canadian electro-industrial band Skinny Puppy went a different route, and have sent an invoice demanding payment:

By now we’re all familiar with the U.S. government’s practice of using heavy metal to torture detainees. We’ve all seen “Zero Dark Thirty” and “Homeland”—we get the drill. Usually metal music is used for its general unpleasantness. It’s impossible to sleep through and just all-around unnerving.

 Except Canadian band Skinny Puppy had no idea their music was being used in the service of the U.S. military.

 ………

 The Independent points out Friday that when Metallica learned their music was being used as a torture device at Guantanamo they sent the the government a cease and desist. Skinny Puppy, on the other hand, went the other way and just sent an invoice.

 “We heard that our music was used on at least four occasions,” Evin Key said. “So we thought it would be a good idea to make an invoice to the U.S. government for musical services.”

 Asked how he felt about his music being used to torture people, he said, “Not too good. We never supported those types of scenarios. Because we make unsettling music, we can see it being used in a weird way. But it doesn’t sit right with us.”

It doesn’t sit right with anyone who values the idea of rule of law and civil rights, Evin.

I would remind you thought that the statutory damages for such a use, it is clearly a public performance, are on the order of $150,000 per infraction.

It might be more worth your while to sue.

Thank You Harry Reid

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The Majority Leader of the Senate has come out against fast track authority for trade deals:

President Barack Obama’s push for authority to fast-track trade deals has hit a big setback in the form of opposition from his top fellow Democrat in Congress, but it is far from dead.

Senate Majority Leader Harry Reid’s warning to policymakers on Wednesday “just to not push this right now” reflects concern about the domestic political agenda ahead of November’s congressional elections, when free trade could be a damaging issue for many Democrats.

The unusually blunt public opposition came less than 24 hours after Obama noted the need for fast-track power in his State of the Union address, albeit less forcefully than business lobbyists and pro-trade Republicans would have liked.

The White House called Reid’s office shortly after his comments to voice displeasure, a top Democratic party aide said.

“They were really upset,” the aide said. But the aide said the White House did not try to get Reid to shift his position.

These guys were really upset because they, like the staffers who negotiated NAFTA for Clinton and Bush I, made some serious bank as lobbyists and consultants.

I really hope that it’s not, as Yves Smith’s sources say,  “Another gambit is more likely: to make some cosmetic changes and try to get the bill passed during the lame duck session, on the assumption that some Democrats (particularly those who are leaving office) will use the cover and change positions.”

The TPP, and it’s European equivalent, the TTIP, are egregiously bad deals, not just for the United States, but for the whole world, because they are predicated on the idea that democracy and transparency must be almost completely eschewed in the interest of unregulated global investment flows and IP based looting through draconian copyright and patent provisions.

These are abysmally bad deals for everyone but banksters, big pharma, and the cocaine addicted brothers in law of senior studio and record label executives.

Pushback on Drug Pricing

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The AIDS Healthcare Foundation is lobbying to keep the $1000.00 a pill Sovaldi out of Medicaid formularies.

I wholeheartedly agree enough is enough:

In a series of letters to be sent to state Medicaid directors starting today, AIDS Healthcare Foundation (AHF) President Michael Weinstein will ask the state directors to block Gilead Sciences’ new $1,000-per-pill Hepatitis C drug Sovaldi (sofosbuvir) from inclusion on their respective state Medicaid and other drug formularies. The drug was approved by the F.D.A. on December 6, 2013 and Gilead immediately announced that it would price the drug at $84,000 for a twelve-week course of treatment—or $1,000 per tablet—making it one of the most expensive drugs ever marketed. Suggested treatment guidelines also require that Sovaldi be used with another drug, ribavirin (a nucleoside inhibitor), further adding to the cost of the prohibitively expensive course of treatment.

 “When is enough, enough? At $1,000-per-pill, Sovaldi is priced 1,100% more than Gilead’s most expensive AIDS drug, Stribild, its four-in-one AIDS drug combination, which was priced at $80 per pill a year ago when it came to market,” said Michael Weinstein , President of AIDS Healthcare Foundation. “At that time, Stribild’s price was 35% more than Atripla, the company’s best selling combination HIV/AIDS treatment, and made Stribild the highest priced first-line combination AIDS therapy. Now, Gilead has set a new benchmark for unbridled greed with its outrageous price for Sovaldi—a price that some pharmacy industry sources suggest represents a retail markup of 279,000% over the cost of actually producing the drug.”

 In his letter to state Medicaid directors, Weinstein wrote, “Gilead is charging a higher price for this drug even though the cost to produce it is small. According to industry reports, Gilead produces Sovaldi for approximately $1.00 per gram (with only 10 to 30 grams needed to successfully treat patients with Hepatitis C).1 This represents a retail markup of over 279,000%.

Enough is f%$#ing enough.

This sh%$ needs to stop.

Wanker of the Day: Yale University

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Before Plugin                                    After Plugin  

Yale has a course selection website, and a two students, Harry Yu and Peter Xu, came up with a personal website that aggregated the ratings so that students could look at ratings and workload when selecting a course.

Yale blocked the site, and threatened disciplinary action against them so another student, Sean Haufler,  wrote a Google Chrome shortcut that does this on the fly.

Basically, Yale does not want students to access this data in a coherent way, because, tenured professors who cannot or will not teach do not want students avoiding their courses:

In January 2012, two Yale students named Harry Yu and Peter Xu built a replacement to Yale’s official course selection website. They it called YBB+ (Yale Bluebook Plus), a “plus” version of the Yale-owned site, called Yale Bluebook. YBB+ offered different functionality from the official site, allowing students to sort courses by average rating and workload. The official Yale Bluebook, rather, showed a visual graph of the distribution of student ratings as well as a list of written student reviews. YBB+ offered a more lightweight user interface and facilitated easier comparison of course statistics. Students loved it. A significant portion of the student body started using it.

Fast-forward two years. Last Friday (1/10/14), Yale blocked YBB+’s IP address on the school network without warning. When contacted, Yale said that YBB+ infringed upon Yale’s trademark. Harry and Peter quickly removed the Yale name from the site, rebranded it as CourseTable and relaunched. Yale blocked the website again, declaring the website to be malicious activity.

Later that weekend, Yale’s administration told the student developers that the school didn’t approve of the use of its course evaluation data, saying that their website “let students see the averaged evaluations far too easily”. Harry and Peter were told to remove the feature from the CourseTable website or else they would be referred to the school’s punishment committee.

………

And then it hit the internet:

Finally, Mary Miller, the Dean of Yale College, wrote an open letter to Yale on Friday night. In this letter, she defended Yale’s decision to censor Harry and Peter’s website and course rating functionality, stating:

“[Yale’s course] evaluations… became available to students only in recent years and with the understanding that the information they made available to students would appear only as it currently appears on Yale’s sites — in its entirety.”


Worded less diplomatically, it appears the Dean of Yale College is expressing to students that, “You can use our course evaluation data, but only if you view the data as we tell you to view it”.

(emphasis original)

And there were the inevitable claims of copyright and trademark infringement, and Mr. Haufler came up with his solution:

The story does not end here, however, since there’s a way to distinguish the freedom of speech issue from the copyright claims. What if someone made a piece of software that displays Yale’s course evaluation data in a way that Yale disapproves of, while also (1) not infringing on Yale’s copyrights or trademarks, (2) not storing any sensitive data, (3) not scraping or collecting Yale’s data, and (4) not causing damages to Yale’s network or servers? If Yale censors this piece of software or punishes the software developer, it would clearly characterize Yale as an institution where having authority over students trumps freedom of speech.

Guess what? I made it last night.

I built a Chrome Extension called Banned Bluebook. It modifies the Chrome browser to add CourseTable’s functionality to Yale’s official course selection website, showing the course’s average rating and workload next to each search result. It also allows students to sort these courses by rating and workload. This is the original site, and this is the site with Banned Bluebook enabled (this demo uses randomly generated rating values).

Banned Bluebook never stores data on any servers. It never talks to any non-Yale servers. Moreover, since my software is smarter at caching data locally than the official Yale course website, I expect that students using this extension will consume less bandwidth over time than students without it. Don’t believe me? You can read the source code. No data ever leaves Yale’s control. Trademarks, copyright infringement, and data security are non-issues. It’s 100% kosher.

………

If Yale denies this right, I’ll see you at the punishment committee.

Here’s hoping that Yale backs down.  If not, I hope that you talk to the ACLU.

In my day, of course, we had to talk to each other, I recall a materials course, taught by a Professor Clapp, was called “Catching the Clapp,” but I only discovered that after I was half way through the class.

I appreciate the value of tenure, but this should not be a justification for erecting the, “The Great Firewall of Yale.”

It’s not like their jobs are at stake over this, just their egos.

Elementary, My Dear Copyright Troll

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A hundred and twenty five years after their publication, a Federal Court judge has told the estate of Sir Arthur Conan Doyle to go Moriarty themselves, and declared that the Sherlock Holmes universe is unequivocally in the public domain:

In the more than 125 years since he first appeared, Sherlock Holmes has popped up everywhere from fan fiction set in outer space to screen adaptations like CBS’s “Elementary,” set in contemporary Manhattan. But now, following a legal ruling, the deerstalker-wearing detective is headed to another destination: the public domain.

A federal judge has issued a declarative judgment stating that Holmes, Watson, 221B Baker Street, the dastardly Professor Moriarty and other elements included in the 50 Holmes works that Arthur Conan Doyle published before Jan. 1, 1923, are no longer covered by United States copyright law, and can therefore be freely used by others without paying any licensing fee to the writer’s estate.

The ruling came in response to a civil complaint filed in February by Leslie S. Klinger, the editor of the three-volume, nearly 3,000-page “New Annotated Sherlock Holmes” and a number of other Holmes-related books. The complaint stemmed from “In the Company of Sherlock Holmes,” a collection of new Holmes stories written by different authors and edited by Mr. Klinger and Laurie R. King, herself the author of a mystery series featuring Mary Russell, Holmes’s wife.

Mr. Klinger and Ms. King had paid a $5,000 licensing fee for a previous Holmes-inspired collection. But in the complaint, Mr. Klinger said that the publisher of “In the Company of Sherlock Holmes,” Pegasus Books, had declined to go forward after receiving a letter from the Conan Doyle Estate Ltd., a business entity organized in Britain, suggesting that the estate would prevent the new book from being sold by Amazon, Barnes & Noble and “similar retailers” unless it received another fee.

………

But the judge rejected what he called the estate’s “novel legal argument” that the characters remain under copyright because, it claimed, they were not truly completed until Conan Doyle published his last Holmes story in 1927.

This is a good thing.

There needs to be limits to the rent seeking related to IP. 

Holmes is already in the public domain in its native Britain, and any further royalties extracted by the estate does nothing to encourage the, “Promote the Progress of Science and useful Arts,” which is the Constitutional justification for our IP regime.

How Iron Maiden Got it Right, and Metallica Got it Wrong

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In the early days of P2P file sharing, it was Metallica to the first file sharing site, Napster, which was shutdown and eventually reemerged as a ……… (furiously Googling) ……… a link to Rhapsody.

Metallica earned a lot of enmity from its fans, and probably sold no more songs as a result.

Iron Maiden found a similar problem, they recently discovered a spike in file sharing in Latin America, and their response was to aggressively market there, and put on a concert tour:

Enter another U.K. company called Musicmetric, which specializes in analytics for the music industry by capturing everything from social media discussion to traffic on the BitTorrent network. It then offers this aggregated information to artists to decide how they want to react. Musicmetric noticed Iron Maiden’s placement and ran its own analytics for the band.

 “Having an accurate real time snapshop of key data streams is all about helping inform people’s decision making. If you know what drives engagement you can maximize the value of your fan base. Artists could say ‘we’re getting pirated here, let’s do something about it’, or ‘we’re popular here, let’s play a show’,” said Gregory Mead, CEO and co-founder of the London-based firm.

 In the case of Iron Maiden, still a top-drawing band in the U.S. and Europe after thirty years, it noted a surge in traffic in South America. Also, it saw that Brazil, Venezuela, Mexico, Colombia, and Chile were among the top 10 countries with the most Iron Maiden Twitter followers. There was also a huge amount of BitTorrent traffic in South America, particularly in Brazil.

 Rather than send in the lawyers, Maiden sent itself in. The band has focused extensively on South American tours in recent years, one of which was filmed for the documentary “Flight 666.” After all, fans can’t download a concert or t-shirts. The result was massive sellouts. The São Paolo show alone grossed £1.58 million (US$2.58 million) alone.

New fans, new sales, a new market.

Interesting business plan, no?

Because It is too Expensive, and the Side Effects are too Extreme

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Over at “Even the Liberal” New Republic, Eric Sasson finds a new drug that reduces the chance of HIV transmission by nearly 99%.

He is perplexed ans surprised that there has been little in the way of publicity or action regarding the now FDA approved drug, Truvada.

The answer to this question is simple. In addition to nasty , potentially lethal blood chemistry changes, osteoporosis, liver problems, hepatitis B infections getting worse, Neausea, vomiting, diarrhea, headache, dizziness, joint pain, trouble sleeping, and back pain, this drug has an extremely high price, to the tune of over $1200 a month.

This is yet another example of how an over broad IP regime.

The retail price, set by the manufacturer by virtue of their monopoly rights under patent, is preventing it from having a meaningful impact on the AIDS epidemic

The solution here is to make patents, particularly those for drugs, less expansive (also, end evergreening), along with an aggressive regime of compulsory licensing.