Thompson & Knight lays off lawyers, staff firmwide notes something we're hearing more and more about nowadays--law firms laying off attorneys, due to Great Depression II. As the piece notes, the Dallas-based firm recently "laid off for economic reasons 17 lawyers and 25 support staff in all of its U.S. offices, including Dallas, Houston, New York, Fort Worth and Austin. ... All of the lawyers are associates -- only two of them are first years -- who practiced in real estate or other business-related areas that require bank money to operate."

But not all is lost: "not all of the firm's practices are doing badly by a long shot, [the managing partner] says. 'There are areas of our firm like IP litigation that are going crazy.'"

As reported on Patently-O, two "inventors" have files patent applications on two "inventions". The first is for SoberTeen(TM) driving insurance. The application claims

a new auto insurance product where a driver receives a 10 to 30 percent discount in premium in exchange for allowing the insurance company to monitor his or her car to determine if anyone drives it while under the influence of alcohol.

I wonder what MADD would say about the patentee trying to use the courts to stop an insurance company from offering this product without paying a ransom?

The other attempts to claim a monopoly on

A method wherein the life or health risk of a person is evaluated based on information maintained in a Risk Profile Data Base (RPDB) and the result of said evaluation is used for one or both of the following purposes: to offer an insurance policy in an underwriting class determined by the said evaluation; to provide said person with a life or health expectancy report containing suggestions on how said person can improve said life or health expectancy.

Is any comment really needed?

Will Proposed New Post-Grant Review Procedures Invite Abuse? that "The Innovation [sic] Alliance" is opposed to reforming the patent system to allow "post-grant review mechanisms"--that is, ways for potential victims of patent extortion to challenge the validity of issued patents. The group is worried this might permit "repeated frivolous patent challenges"! Got that--not frivolous patents, but frivolous patent challenges! This is like a plaintiffs' lawyer who files frivolous lawsuits complaining about people defending themselves from it--they ought to just cough up the demanded money and quit finding "frivolous" defenses!

Here, people who use the power of the state to unjustly acquire a monopoly that gives them the right to legally extort victims are complaining about "frivolous patent challenges". Wow, some chutzpah.

The post also notes:

The fear is that such service provides will offer to "creat[e] uncertainty about a problem patent by tying it up in a long reexamination process and effectively nullify the problem patent" to get lower rates during license negotiations "until the uncertainty ends."

So.... to avoid reducing the amount of extortion holders of "problem patents" can demand, we should just presume patents are valid--even if they might not be--and don't allow any kind of challenge that could just "cause uncertainty." Wow.

I don't know. I prefer justice to certainty. Call me crazy.

I don't mean the James Bond movie, or Ron Paul, Congress's "Dr. No." This wonderful, eye-opening piece by the heroic IP-abuse reporter Joe Mullin, The Fight of His Life (Mullin's blog, The Prior Art) highlights the appalling ordeal of Dr. Bob Shafer, a bioinformatics expert. Yet another case of patent law victimizing innovation and innocent people.

As such stories tend to be, this one is complicated, but it's crucially important, so bear with my attempt at a concise summary. Dr. Shaffer, an associate professor of medicine and pathology at Stanford University, established the HIV Drug Resistance Database (HIVdb) (wikipedia link) in 1998. As the article reports,

Since then, the database has built a following among HIV researchers and practitioners around the world, attracting some 50,000 unique visitors a month. Those who use it generally fall into three categories: academic researchers, commercial and noncommercial laboratories, and doctors. ... The database allows users to enter genetic information for viruses from individual patients or groups of patients, and to retrieve drug resistance information, which can then be used to help devise treatment regimens. Such information is critical to HIV research and drug development, as well as to treating individual patients. HIVdb is especially popular in the developing world not least because it's freely available to anyone with an Internet connection. In some developing countries, medical practitioners have heard of Stanford University mainly through their interactions with HIVdb.

This is quite obviously a heroic, important, noble and benevolent effort. As the article notes, it's "a highly regarded free resource that he developed, Stanford hosts, and doctors and scientists around the world rely on."

However, in January 2007, ABL, a medical software company based in Luxembourg, claimed that the database infringed its patents. Read the article for more details, but in short: Stanford first moved to invalidate ABL's patents by filing a declaratory judgment suit in California in October 2007; but then later settled with ABL, where ABL agreed not to sue Stanford for patent infringement and Stanford agreed to put a prominent disclaimer on the HIVdb, informing those who used it that, depending on the nature of their work, they might need a patent license from ABL. However, Shafer wasn't required to sign the agreement with ABL and was not told him about the settlement's terms until after it was reached.

Shafer at first refused to post the notice, and bully for him. He was afraid it would lead doctors to think they owe money to ABL, "and that the database built mostly with taxpayer-funded National Institutes of Health grants is no longer free." Finally, under pressure, he did post a notice but he appended his own language arguing the patents are overbroad and invalid. See about halfway down on this page, where Dr. Shafer bravely challenges the validity of these patents. He also launched the site Harmful Patents, where he defiantly and courageously challenges the use of these patents to claim "a monopoly on the very concept of developing software to help physicians make treatment decisions"--absurdly, the patent gives ABL a monopoly on "the science of using computers to enhance medical treatment and decision making." As one of Shafer's colleagues notes, "If you read [ABL's patents] literally, anyone who is providing therapeutic options based on the sequence of a pathogen violates their patent, and that goes on in hundreds of contexts. It's truly a dangerous precedent."

Although ABL already settled with Stanford, its suit against Sahfer for breach of contract and defamation is ongoing. According to Mullin's report, Shafer has racked up more than $100,000 in legal bills and his career is in jeopardy, since he's fighting ABL and refused to cravenly give in, as his employer, Stanford University, arguably did.

I do not know if Shafer seeks or needs or welcomes help, or how it might be done. But I am all in favor of helping this man fight these people, and fight for the principle of "free access to published data" as "an intrinsic part of science and medicine." Good for Shafer, and for Mullin for bringing this to light.

The Techdirt post Court Rejects Online Terms Of Service That Reserve The Right To Change At Any Time spurred me to post a comment about this, collecting some of the thoughts I've had about such matters for a long time.

As I note there, my own theory of contract is presented in my article A Theory of Contracts: Binding Promises, Title Transfer, and Inalienability. And while I of course as a libertarian favor freedom of contract, I am leery of too formulaic or formalistic libertarian positions. Partly this stems from my growing aversion to "armchair" theorizing (see my post The Limits of Armchair Theorizing: The case of Threats). But as an example, and as I noted in the contract article, I disagree with putting so much stock in whether a communication is a "promise" or not (Rothbard, e.g., puts a bit too much emphasis on this, in my view). The question is what the parties meant by their communication--even if the word "promise" is used, this could be intended to effectuate a transfer of title. Another is, say, the over-emphasis on the notion of "incitement" by Rothbard and Block (as discussed in Causation and Aggression). They want to rule out "incitement" as a type of aggression in all cases; to my mind, it's a more context-dependent determination. Maybe it is, maybe it isn't.

A similar issue arises in the case of contracts. Many libertarians, often with only a crude understanding of the nature of contracts, just assume, Rand-like, some kind of mystical "power" to "bind" oneself by "a contract". They tend also to equate contracts with a written agreement. They thus tend to think that "if it's written in ink, it's binding, no matter what". To my mind, this is too formalistic. A writing is neither necessary nor sufficient to form a contract. Most contracts are not written. They may be oral. They do not even need to be verbal--I hand you a dollar, pointing to the newspaper; you take my dollar and give me the paper. A sale happens, nonverbally (no oral or written communication). And "what is written" is not necessarily dispositive. To my mind, a written agreement is only evidence of what the parties actually agreed to. But it is rebuttable. The written agreement may be very sparse: in which case in the case of disputes, there is no choice but to resort to "gap-fillers," default rules, and the like. Or the agreement may contain ambiguities or even inconsistencies--this may require similar construction methods, or even invalidation of the agreement.

The agreement may not even be intended to be binding, such as in the case of a so-called "simulation" (a contract which, by mutual agreement, does not express the true intent of the parties; see my Civil Law to Common Law Dictionary, entry for "Simulation"; Louisiana Civil Code, arts. 2025-27).

Or there may be fraud or deception which nullifies the whole writing or requires certain provisions not to be enforced.

Given all this, in my view we should not just assume that "whatever is in writing" is part of a binding obligation or enforceable agreement. This bears on the issue of fine print, and so-called shrink-wrap and clickwrap agreements (incidentally the law of various countries on this issue is discussed in my book Online Contract Formation--which is not bedside reading, n.b.). Libertarians seem to just assume, too quickly in my view, that all such fine print should be enforceable. These assumptions seem to be made in the absence of the awareness of the nuances noted above.

So one problem with click-wrap agreements, for example, is that there is (arguably) often no "meeting of the minds" on the fine print--and the vendor is fully aware of this. If the customers routinely just click the "I have read and agree to these terms" box but never do read it, and the vendor knows this, then it's a sort of fiction to assume both sides have actually agreed on these terms. For example supposed buried in fine print for a contract for sale of a $20 software program is the provision, "Buyer agrees to give 50% of his income to Vendor for life." Is this enforceable? Of course not. Why not? Because there was no agreement to this. So the "hidden" terms have to be in some sense reasonable, at the least. (Here, too, "inalienability" concerns may kick in--even if the party is fully aware he is signing away his life income, or his kidney, or life, say, this may not be enforceable for inalienability concerns--see, on this, the contract article noted above, plus my article Inalienability and Punishment.)

I am not saying that clickwrap and fine print is not enforceable--I'm just saying that the libertarian view on property rights and contracts does not require that we formalistically equate "the contract" with "the writing," and it does not require we figure all this out from our armchairs. The libertarian view can recognize that contracts about consensual, intentional transfers of title; that manifesting such consent is a matter of communication; that making determinations about the nature of a contract, or title transfer, is necessarily a fact-specific, context-bound inquiry.

by using The Pirate Bay. Just kidding.

It's bad enough they want us to celebate "World IP Day". But now they are focused on "promoting green innovation." Groan. Gotta love this state-sponsored propaganda-fest.

Celebrate World Intellectual Property Day

Today [April 26, 2009] is World Intellectual Property Day and this year WIPO's focus is on promoting green innovation as the key to a secure future.

According to WIPO, most people are aware of intellectual property (IP) but many still view patents, copyrights and trademarks as business or legal concepts with little to no relevance to their own lives. To address this gap, WIPO's Member States decided in 2000 to designate an annual World Intellectual Property Day. They chose April 26, the date on which the Convention establishing WIPO originally entered into force in 1970.

Each year, WIPO and its Member States celebrate World Intellectual Property Day with activities, events and campaigns. These are an attempt to increase public understanding of what IP really means, and to demonstrate how the IP system fosters not only music, arts and entertainments, but also all the products and technological innovations that help to shape our world.

WIPO issues a message from the Director General each year, broadcasts a short publicity spot on international television channels, and dispatches posters and other promotional materials to IP offices and organizations.

In EE Times: Opinion: Engineers should stage a patent strike, I noted an op-ed by Rick Merritt in EETimes, "Opinion: Engineers should stage a patent strike."

A Mr. J. C. Cooper, of Pixel Instruments Corp., replied with a letter to the editor in defense of the patent system. My reply is reprinted below:

***

Mr. Cooper writes:

"Your articles in the April 20 edition of EE Times ["Dealing with Mad Patent Disease"] which portray the U.S. patent system as broken and worse seem terribly biased. I wonder where you are getting your information. Surely you don't have any direct experience with patents, e.g. using a patent to protect a money making invention, or you would be able to formulate a more balanced viewpoint."

I'd like to respectfully disagree with some of Mr. Cooper's contentions. As a preliminary matter, I disagree that only those with a lot of experience in patenting are entitled to have an opinion, or ought to be accused of being "biased" if they dissent on the mainstream viewpoint on IP rights. that said, I am a practicing, registered patent attorney, with BSEE and MSEE degrees. I've represented many clients and obtained hundreds of issued patents over the last 15 or so years.

Mr. Cooper writes,

"The patent system could use some tweaking but it is far from the "mad patent disease" you describe. The U.S. needs a stronger patent system, not weaker .... The only way that innovation, and its industry, can be protected is with intellectual property, i.e. patents. To weaken the patent system at the urging and benefit of a few large multinational corporations (most of which have been found guilty in court of stealing the property of others) runs the risk of destroying that one remaining thriving U.S. industry."

There are a few problematic assumptions and chains of reasoning here. I agree that innovation is good, but Mr. Cooper's assumption that "The only way that innovation, and its industry, can be protected is with intellectual property, i.e. patents" is unwarranted. There are of course other ways--exclusion methods; first-to-market; trade secrets, and so on. And there are other methods discussed extensively in Boldrin and Levine's Against Intellectual Monopoly. No one can seriously argue there would be no innovation without patents. At most, you can argue there is more innovation under a patent system.

But the patent system obviously has costs. So the argument that we need a patent system to encourage more innovation assumes that the value of the extra innovation induced by a patent system is greater than the costs of the patent system. But as I note in my article "There's No Such Thing as a Free Patent" (links below to this and others mentioned here), no one has ever been able to show this. In fact, most studies and analyses I'm aware of conclude that if anything, the cost of the patent system is greater than the value of any extra, marginal innovation stimulated. Some analyses even conclude that there is less innovation overall under a patent sytem, than there would be without one--so that added to the undeniable cost of the patent system is the cost of the lost innovation.

If Mr. Cooper is aware of information no one else seems to have--what is the net value of the patent system (i.e., what is the value of the extra innovation induced by the patent system, minus any lost innovation, minus other costs of the patent system), I and others would love to see this data.

Mr. Cooper implies that those opposed to IP rights are biased, or not "balanced," or are mainly "a few large multinational corporations (most of which have been found guilty in court of stealing the property of others)." But surely individuals and even companies are entitled to their viewpoint. It can easily be argued that those who can profit from the patent monopoly granted to them by the state are also biased, and are willing to argue in favor of the patent monopoly system--that they do not really care whether the system is a net benefit to the economy overall--that they are happy to have it exist so long as they benefit from it, even if this is at the expense of overall innovation and growth. Certainly, the deafening silence of advocates of IP to provide any data that supports their contention that patents indeed spur innovation worth more than the cost of the system, casts suspicion on their sincerity. (And is it really that surprising that patent attorneys are almost uniformly pro-IP rights?)

Mr. Cooper's aside that most of the "large multinational corporations" complaining about patents "have been found guilty in court of stealing the property of others" begs the question of whether IP is, or should be, recognized as a legitimate form of property rights, by calling it "stealing" of "property". The question is whether patterns of information are, or ought to be ownable as property. In my view, not only does the patent system cause overall economic damage in the billions of dollars, but patent and copyright are not legitimate forms of property rights--in fact, patent and copyright are contrary to, and undermine, private property rights. As I argue in my book Against Intellectual Property, a free market relies on private property rights being respected, which means scarce resources are owned by the original homesteader of the property, or that person's descendant in title. But to grant a patent to someone who finds a new way to use their own property, is to grant that person some rights in how other people use their own property--this is redistribution from owners, to outsiders. As an example, if the state granted me the right to prevent Mr. Cooper from using his car to transport passengers--if I had this type of veto right--then I could demand he pay me a royalty for my permission to let him carry passengers. I would be a partial owner of his car--where before, he was the full owner, now he is only a part owner. This would be a type of theft of Mr. Cooper's rights in his car, a transfer from him to me. This is what the patent system does, and it is ethically unjustified and contrary to the sanctity of private property rights.

It is understandable that technology companies take advantage of the state's patent system; they have virtually no choice, if only for defensive reasons. And it is understandable they become used to this model, and cannot imagine how their business model would change if the state did not intervene in the market with IP law. But this does not mean IP law is justified.

For those interested in further reading on this (and for links to some of the sources mentioned above), I recommend:

1. The superb new book Against Intellectual Monopoly, by economists Boldrin and Levine.

2. Jeff Tucker's excellent commentaries on Boldrin and Levine.

3. Some of my material, many on Mises.org. Such as: my little book, Against Intellectual Property, my article "There's No Such Thing as a Free Patent," and my presentation, "Rethinking IP Completely," all available here.

4. Mike Masnick's frequent and excellent anti-IP commentary on Techdirt.

There are many other excellent anti-IP pieces, but this is a good starting point.

I have been repeating the following to people in emails of late, in response to queries about the free-market opposition to intellectual property, so below I provide a concise list of links for some good material explaining the libertarian/free-market case against IP:

1. The superb new book Against Intellectual Monopoly, by economists Boldrin and Levine.

2. Jeff Tucker's excellent commentaries on Boldrin and Levine.

3. Some of my material, many on Mises.org. Such as: my little book, Against Intellectual Property, my article "There's No Such Thing as a Free Patent," and my presentation, "Rethinking IP Completely," all available here.

4. Mike Masnick's frequent and excellent anti-IP commentary on Techdirt.

There are many other excellent anti-IP pieces, but this is a good starting point.

Looks like Great Depression II has helped forced the parties to a gargantuan, long-standing patent battle to the negotiating table. From The American Lawyer: Litigation Daily:

Looking back, we knew this day would come. For the last four years, Broadcom and Qualcomm have been litigating against each other with the chess-match strategic intensity of Cold War rivals, as we learned when we spent a few months in the fall of 2007 reporting and writing an American Lawyer cover story on the epic litigation. Trust us, these companies don't like each other. But we knew they couldn't sustain the pace and expense of litigation that literally spanned the globe. Qualcomm, which seemed to get beat up in case after case by Broadcom, simply could not justify paying hundreds of millions of dollars to the likes of Cooley Godward Kronish, DLA Piper, and Cravath, Swaine & Moore.

And so, on Sunday night, the two announced they had reached peace, agreeing to drop all litigation against each other. That's going to leave a gaping hole in the dockets of the International Trade Commission, the federal district court in Santa Ana, Calif., the European Commission, and the Korea Fair Trade Commission. The deal includes a multiyear patent agreement and requires Qualcomm to pay Broadcom $891 million over a four-year period. ... Qualcomm insists that nothing in the Broadcom settlement agreement will affect its highly profitable business model of licensing its technology. "We will be able to continue to operate as in the past," Qualcomm's general counsel, Don Rosenberg, told The San Diego Tribune. "But we're not standing around here thumping our chests."

Rosenberg said cutting legal costs was "clearly a factor" driving settlement talks. According to one estimate, Qualcomm was spending $100 million annually in its fight with Broadcom. ... "It's not unusual in a case like this, as you get near settlement, for there to be negotiated reductions in legal expenses," French said. "It's a natural course. If a company does not get its optimum desired result, needless to say, it is looking for how to minimize its total financial exposure."

Hundreds of millions of dollars down the rathole, and hundreds of millions more to be paid in the future--what a productive use of resources the patent system "stimulates". And to think--some pro-patent types want to foist this system on China -- one patent hawk raves: "The quality of patents issued in China is also improving. Revisions to the patent law that take effect in October strengthen the requirement for a patent's novelty, bringing it up to global standards. Stronger patents are easier to enforce, opening the door to more lawsuits." And that's a good thing? China, do not listen to Americans! on Tax policy, antitrust, or IP!

From zenhabits: Feel the Fear and Do It Anyway (or, the Privatization of the English Language)

Post written by Leo Babauta.

Today I received an email from the lawyers of author Susan Jeffers, PhD., notifying me that I'd infringed on her trademark by inadvertently using the phrase "feel the fear and do it anyway" in my post last week, A Guide to Beating the Fears That Hold You Back.

The phrase, apparently, is the title of one of her books … a book I'd never heard of. I wasn't referring to her book. I'm not using the phrase as a title of a book or product or to sell anything. I was just referring to something a friend said on Twitter.

Her lawyers asked me to insert the (R) symbol after the phrase, in my post, and add this sentence: "This is the registered trademark of Susan Jeffers, Ph.D. and is used with her permission."

Yeah. I'm not gonna do that.

I find it unbelievable that a common phrase (that was used way before it was the title of any book) can be trademarked. We're not talking about the names of products … we're talking about the English language. You know, the words many of us use for such things as … talking, and writing, and general communication? Perhaps I'm a little behind the times, but is it really possible to claim whole chunks of the language, and force people to get permission to use the language, just in everyday speech?

What if this were taken to an extreme? What if some billionaire (say, Bill Gates) decided to start trademarking thousands and thousands of phrases, so that he could charge us for each use, or so that we'd have to link back to the Microsoft homepage with each reference? The language, in this scenario, could be entirely privatized if we allow this sort of thing.

So, while this post is probably ill-advised (and yes, I realize that I'm actually giving publicity to Ms. Jeffers), I have to object. I think we have a duty, as writers and bloggers and speakers of the English language, to defend our rights to … words. Free speech is a bit of an important concept, I think.

As an aside, I think the idea of jealously protecting copyright and trademarks, in this digital age, is outdated and ignorant. You want your ideas to spread, and you should encourage people to spread your ideas, not put up all kinds of boundaries and restrictions and obstacles to that being done. This blog, for example, is Uncopyrighted, and will always be free, because I want people to spread my posts and ideas. I think it's actually good for me as a writer, and it's (not insignificantly) better for the writing community in general if we can share each others' work freely. I'm hoping that with posts like this, and the good work of thousands of other like-minded people, the old mindset of fencing off ideas and language will slowly change.

So, no, I will not be adding a Registered Trademark symbol to the previous post. And no, I won't be adding a phrase of legalese to the post. And no, I won't even attribute the phrase or link to her book, as I wasn't referring to the book. And no, I won't remove the phrase.

I'd rather be sued.

Oh, and I'm not going to change the title of this post either. You'll have to remove it from my cold, dead iMac.

On a side note: You may feel free to use the title of my book, The Power of Less, in any of your blog posts, on Twitter or even (gasp) everyday conversation.

[Cross-posted at Mises blog]