Details from the S.F. Chronicle -

In a victory for small-time music copiers over the entertainment industry, a federal judge ruled today that copyright-holders can't order one of their songs removed from the Web without first checking to see if the excerpt was so small and innocuous that it was legal.

The ruling by U.S. District Judge Jeremy Fogel of San Jose was the first in the nation to require the owner of the rights to a creative work to consider whether an on-line copy was a "fair use" - a small or insignificant replication that couldn't have affected the market for the original - before ordering the Web host to take it down.

The decision isn't as far reaching as it ideally needs to be, but its a small positive step.

Read the whole thing here to learn more.

The Washington Post gives front page coverage to the high cost of textbooks and what can be done about it link here. It notes that Congress passed a bill "forcing publishers to release more information about their prices. It also requires them to sell a textbook separately rather than packaged with a CD or workbook that makes for a more expensive purchase. However, the provisions do not take effect until 2010." Several states have passed similar laws as well.

The article goes on to note the thriving used textbook market but observes that prices are very close to those of a new text. Some teachers are also encouraging used texts by not changing them from year to year. Finally, the authors note the existence of a thriving exchange for scanned copies link here using a disclaimer that the site is not responsible for text illegally copied, since all users sign an agreement that are the original owner or abide by the copyright laws.

The article fails to mention the legal downloading of texts available on the internet where the author has put them under open license.

In previous posts (Troll Tracker's Identity Revealed :( and Troll Tracker [Why People Hate Lawyers]), I discussed threats and bounties put up by patent attorney Ray Niro against the then-anonymous Troll Tracker (who repeatedly highlighted various patent lawsuits Niro was filing), which finally resulted in Troll Tracker being exposed as an in-house patent attorney at Cisco, Rick Frenkel. Frenkel was then sued for defamation by two lawyers in Texas, based on comments he had made about them on his blog.

Good news: as reported in Troll Tracker blogger Rick Frenkel moves to Wilson Sonsini, he has "left Cisco Systems and moved to Wilson Sonsini Goodrich & Rosati, a top Silicon Valley law firm, where he is of counsel. 'We were impressed with his breadth and depth of experience,' said Michael Barclay, an IP litigation partner at Wilson Sonsini and a PTT reader, natch. 'Rick has developed a lot of knowledge and insights about patent trolls that will be helpful to our clients who have to deal with them.'"

Good! Go get 'em, Rick!

See also Cisco Blogger Decamps to Wilson Sonsini. Regarding the related Scott Harris matter, see Scott Harris v. Fish & Richardson litigation is settled (discussed in my Troll Tracker [Why People Hate Lawyers] and A Tangled Web of Patent Rights).

Re the defamation suit: see East Texas lawyer subpoenas Google for more info about PTT and Patently-O blogs.

As reported on The Patent Prospector blog,

Inventor Gary Odom, founder of Patent Hawk, has asserted 7,363,592 against Microsoft. '592 claims a feature of the tool groups used in the Office 2007 tool ribbon.

Now, as noted on the Patent Prospector blog, "Microsoft was a Patent Hawk client for years. They had every opportunity for friendly [sic] discussion. The words 'patent tax' were used, and Microsoft chose a path consistent with their corporate culture."

A few observations. First, it is striking that Odom is suing is former client. Second, Patent Prospector whines that Odom just wanted a "friendly" discussion, and big ole' mean Microsoft wouldn't play ball. Hint: it's not "friendly" when you threaten to sic the state thugs on someone if they don't pony up. If the thugs in power didn't make it legal, it would be called "extortion."

Third, Patent Prospector implies that there's something wrong with viewing such a threat as a "tax". There's not. That's exactly what it is. Odom threatens his former client with severe financial damage by the state's thugs, and they call it a "tax." Hey, unfair! They are supposed to just pay their former attorney! Patent Prospector whines that Microsoft's "corporate culture" is a problem here, in viewing such demands as a tax. Would that more companies would openly call these extortortionate demands what they are.

But maybe we're a bit unfair to just take Patent Prospector's word for what really happened between Patent Hawk/Odom and Microsoft. Oh, wait--Patent Prospector is also apparently run by Patent Hawk/Odom.

Correction: In the original post, I referred to Odom as a patent attorney. My assumption was wrong. After someone suggested to me Odom was not a patent attorney, but was a patent agent instead, I checked on the PTO attorney/agent roster and could not find him. On his Patent Prospector site, he describes his fellow blogger as a patent agent, but not himself. And on the site for Platinum Patents, his "patent prosecution boutique," he describes his colleague as a patent agent, and himself as "a pro se prosecutor of his own inventions". So Odom is apparently a "technical consultant" who advises on a variety of patent-related matters.

I think I just may start asking patent attorneys my company hires to include a little clause in the retainer agreement: "and we promise not to sue you, our client, for patent infringement in the future."

Incidentally, Odom and I had a disagreement previously about the patent system, in the comments to this post. Odom takes the typpical pro-patent position. Unsurprising given that he is "a former professional economist who drove his interest in technology into a career in computers, electronics, and software development, areas he made his profession for 17 years. Gary is a long-standing member of IEEE and ACM."

Regarding the typical approach of engineers to policy and their tendency toward scientistm, see my posts Engineers' Syndrome and Galambos and Other Nuts.

Update: See Techdirt's post by Mike Masnick, Microsoft Sued Over User Editable Toolbar Patent, in particular the comments on the "obviousness" of the claims of the Odom patent. Masnick notes there that Patent Hawk (Odom) has "been known to comment here on occasion, employing the style seen all-too-often among patent system apologists commenting on Techdirt posts: insult repeatedly and broadly, offer no actual points, refuse to actually counter anything we say, provide absolutely no evidence and (for good measure) insult again."

For example, as in this previous post about the poor quality of patent applications, where Odom posted: "This little op-ed piece is ignorant tripe, none of it having any factual basis. Nothing but fantasy based on rumor and imagination. Pathetic, really.

Masnick's reply:

Hi Patent Hawk. Here in the real world, when we disagree with something, we actually make an "argument." It's called explaining why something is incorrect and presenting counter evidence.

I've noticed a pattern when I talk about patents. Most (though, certainly not all) of the folks who disagree with me simply stop by and toss insults and never present a shred of evidence to support their position.

It suggests to me that I'm clearly on the right track.

Indeed! See also Odom's similar style of engagement--or lack thereof--with me on the comments to this post.

See also my comment on that thread:

Note one of the derisive comments on Hawk's blog, which concerns this patent's parent patent:

How about the PARENT patent? #7,036,087 that issued on 04/25/2006.

Why didn't you try to assert this one against micro$oft or others? Or did you? Or was it already invalidated? :)

For the record, here are the issued claims from the parent patent #7,036,087.

1. Software from at least one computer-readable medium automatically rearranging at least one tool based upon relative usage frequency of tools within a toolbar group.

2. Software according to claim 1 preventing at least one tool from being rearranged.

3. Software from at least one computer-readable medium automatically rearranging at least one group of a tools on a toolbar based upon aggregate usage frequency of tools within a tool group compared to another group.

4. Software according to claim 3 preventing at least one group from being rearranged.

(Cross-posted at Mises blog.)

Right now on Amazon, in the "Intellectual Property" legal books subcategory, my Against Intellectual Property (Amazon link) is ranked #22, and Boldrin and Levine's Against Intellectual Monopoly (Amazon link) is #48. Eat my dust, suckas! :)

Interestingly, both books are available for free online, yet the print editions are still selling well.

A patent attorney friend had this idea:

"Perhaps the Supreme Court and CAFC ought to simply make its opinions re UN-patentability more derisive. That might really go a long way. Maybe have Scalia write things like: 'Really, a new gas pedal, REALLLY??? Give me a break even I could have 'invented' that. Don't bring me that weak s@#t, meat*.'"

*Bull Durham paraphrase

Details from the L.A. Times:

Caltech economics professor R. Preston McAfee finds it annoying that students and faculty haven't looked harder for alternatives to the exorbitant prices. McAfee wrote a well-regarded open-source economics textbook and gave it away -- online. But although the text, released in 2007, has been adopted at several prestigious colleges, including Harvard and Claremont-McKenna, it has yet to make a dent in the wider textbook market.

"I was disappointed in the uptake," McAfee said recently at an outdoor campus cafe. "But I couldn't continue assigning idiotic books that are starting to break $200."

McAfee is one of a band of would-be reformers who are trying to beat the high cost -- and, they say, the dumbing down -- of college textbooks by writing or promoting open-source, no-cost digital texts. ... "What makes us rich as a society is what we know and what we can do," he said. "Anything that stands in the way of the dissemination of knowledge is a real problem."

McAfee said he wrote his open-source book because the traditional textbook market is broken. Textbook and college supply prices nearly tripled between 1986 and 2004, an audit by the federal Government Accountability Office found in 2005.

Read the whole thing here.

Then, if you want to learn something about economics, download Professor McAfee's textbook here.

Also check out the Multimedia Educational Resource for Learning and Online Teaching [MERLOT] here.

Under the Declaratory Judgment Act, if you are threatened with a patent infringement suit, you can file a "Declaratory Judgment" action to get the court to declare the rights and settle the matter. The MedImmune decision made it easier for licensees to challenge the validity of patents they had previously licensed with a DJ action.

See The Scream, for a recent example: in this case, a potential infringer failed in its attempt to to institute a declaratory judgment action:

"Prasco got so paranoid about infringing patents from competitors Medicis Pharmaceutical and Imaginative Research Associates that it filed a declaratory judgment motion. The problem for Pasco was that Prasco wasn't even on the defendants' radar screens. The district court pitched the case, and the appeals court concurred."

So here's my proposal. I welcome any comments:

The Declaratory Judgment Act should be expanded to make it easier for potential infringers to bring an action against a patentee if there is any doubt by the potential infringer. For example, if A is worried about violating B's patent, A could request B to provide a written exoneration statement that it does not intend to sue A or request a license, for a given product. If B does this, B is estopped from ever suing A for patent infringement with respect to that product--B waives his right. If B refuses to provide the statement within 30 days (say), then A has a right to seek a DJ. Better yet A provides B a description of its product and demands an exoneration statement; if B does not provide one, it releases its right to sue A. This would give B 30 days to decide whether to admit to A that it intends to sue. If it makes this admission, this triggers A's right to seek a DJ.

One person I ran this by asked why the patentee can't just always reply with a ridiculously high license offer. The answer is: because that opens the patentee to a DJ action. The patentee would have a dilemma: say no, and give up the right; or say yes, and be (maybe) sued. To my mind, this puts them in the same position as potential infringers: potential infringer never knows when the patentee might simply decide to sue him... or not. If he does, the accused infringer could face millions in legal fees. So he has to sit there, hoping not to get sued.

In my proposed system, the potential infringer can turn the tables: give the patentee, who after all is sitting on a legal right to intimidate--give him a choice, make him decide whether he will use it or not. At least say "maybe", and give the infringer the right to sue for DJ. So the patentee is not ready for such a suit? He can't handle it? Aww, poor patentee, sitting there at the mercy of potential infringers. Just like they are at his mercy!

A patent attorney friend comments:

"Interesting idea - allow the potential infringer to create the "case or controversy" with its request for exoneration rather require some act by the patent holder. Wouldn't this effectively allow Federal Courts to give advisory opinions on patent infringement? I guess you could argue that there is still a "case or controversy" under Article III. I think the potential infringers could abuse such a procedure by burying the patent holders with requests for multiple products or variations of products and by referring to multiple patents. Then again, patent holders can (and do) abuse our current system by threatening and asserting multiple patents against potential infringers."

The United States thinks of itself as a free economy with lots of competition. But I am often struck by the number of petty monopolies that exist. Here is one in Montgomery County Maryland where a woman, certified to massage people, can't massage her favorite patients, horses link here. Why? Because to massage horses, you have to be a veterinarian. The case gets worse. She has also been informed that chiropractors are specifically forbidden from practicing on animals. She is suing to be allowed to massage animals but is being opposed in court by the state veterinary board and the state chiropractic board.

Doesn't survive the laugh test, does it? It would be of interest to add all these cases up and see what they cost the public.

On Marginal Revolution, Alex Tabarrok reviews Boldrin & Levine's Against Intellectual Monopoly. According to Tabarrok, the book "is a relentless, pounding, take no prisoners attack on patent and copyright law.  It joins Lessig's Free Culture and Heller's The Gridlock Economy as an instant classic and a must-read on these issues. "

I don't know much about Tabarrok but as he has published in the libertarian journal Reason Papers, in The Free Market, and has writen some libertarian-ish sounding books published by the libertarian Independent Institute (and positively reviewed in the QJAE). So I assumed he was a libertarian. But here, though he seems to recognize some (practical) problems with patent and copyright, he doesn't want to abolish the state IP system altogether.

You see, "there is a Laffer curve for innovation - more appropriability increases innovation at first but innovation declines when appropriability extends too far." So though he agrees "with Boldrin and Levine that rent-seeking has put us on the wrong side of the Laffer curve for innovation," we should not abolish IP either. We need to try to "optimize" it, I suppose. Alas, "there is no invisible hand theorem which moves us automatically to the top of the curve".

So, though it's apparently politically impossible ever to "optimize" IP protection, to ensure that we are not "on the wrong side of the Laffer curve for innovation", and economically impossible to know we had reached this point anyway--nonetheless, wealth-maximizers like Tabarrok soldier on, advocating keeping a state-run IP system. So what should we do? "We need to reduce intellectual monopoly with patent reform, less copyright protection, and a greater use of patent substitutes like prizes." In the linked post, Tabarrok writes that he "might actually sign on to" The Medical Innovation Prize Fund Act of 2007, introduced by socialist Senator Bernie Sanders ... a bill which would not even abolish patents, but which would augment the patent system with a taxpayer-funded "medical innovation prize fund"--starting at "$80 billion per year, and increas[ing] with the growth in GDP"... ! Damn, $80 billion down the drain--puts my own little estimate that the patent system imposes around $28 billion in costs to shame!

Advocating state-funded "prizes" is about as unlibertarian as proposal as you'll see. And you don't need to do "marginal analysis" to figure that one out.

***

Update: Tabarrok here advocates using taxpayer funds to pay patentees to give up the patent rights that the federal government grants them. Why not just ... refrain from giving them the patent right in the first place? Because that would cause an "underproduction" of "innovation", by reducing "appropriability." Whatever. So he has to find a way to keep "appopriability high," and thus cannot give up a patent monopoly, or a tax-funded "subsitute" for it.

Anyway, note that the annual $80 billion taxpayer-subsidized fund--well, probably at least $82 billion by now, if we account for GDP growth since 2007, as Sanders and Tabarrok want to -- is for medical innovation only. This covers only a small slice of all patent innovation--in fact the "prize fund" also covers "non-patented products"--because, due to the patent system, "innovations without property rights are underfunded". So consider what this means. If we subsidize medical innovation to the tune of $82B a year, there is no reason not to subsidize other patentable--and even non-patentable--inventive areas. Hell, why stop there? Inventions are not the only types of innovation that should be rewarded. What about the copyright fields, like novels, painting, website design? And other areas of innovation, like boat hull designs and databases? And semiconductor maskworks, and trade secrets? And what about more fundamental research in the basic sciences? Let's see, I think the $82B for medical innovation is at most, say, 10% of all technical innovation. So we need another $820B for other technical fields. And surely the value of the artistic, boat hull design, semiconductor maskwork, and database works are at least on the same order of magnitude as the technicall innovations. So let's say it's another $ trillion, for $2 trillion. A year. To start. Now, what about basic science--physics, math, astronomy? Who can put a value on that? Well, I guess we have to--say, another cool $300B. And what about trademarks? My heavens, they are worth at least as much as patent and copyright, so let's add another trillion. So now we are up to $3.3 trillion. This is in addition to our current $2.5 trillion federal budget. So now the federal budget is, say, $6 trillion, out of about $14 trillion GDP. I'm sure our good marginal economists will assure us that this expenditure will increase appropriability--which will increase innovation, which will have a measurable value--and that this extra value will far exceed the $10 trillion or so that would need to be generated to just break even (assuming 35% of the extra wealth is taxed to replenish the $3.5T annual prize fund). Wow, what a great way to reach a $24 trillion GDP--just increase taxes by $3.5 trillion!! Genius! This never occurred to me. No wonder I'm not an economist.

Update 2:

And get this: according to the text of socialist Sanders's draft bill, the $80 billion+ taxpayer-funded "Fund for Medical Innovation Prizes" will be administed by a "Board of Trustees for the Fund for Medical Innovation Prizes," composed of 13 members serving 4-year terms. The 13 members of the Board are:

(1) the Administrator of the Centers for Medicare & Medicaid Services; (2) the Commissioner of Food and Drugs; (3) the Director of the National Institutes of Health; (4) the Director of the Centers for Disease Control and Prevention; and (5) nine individuals to be appointed by the President, with the advice and consent of the Senate, of which: (A) three representatives of the business sector; (B) three representatives of the private medical research and development sector, including at least one representative of the non-profit private medical research and development sector; and (C) three representatives of consumer and patient interests, including at least one representative of patients suffering from orphan diseases.

Each Board member will be paid at the equivalent of an annual salary of about $140k for daily service. They'll of course have expenses paid, and a staff, and budget to hire experts and consultants.

And every year, the Fund gets public funding equal to "0.6 percent of the gross 6 domestic product of the United States for the preceding fiscal year."

Jesus, this is pure evil.

(Cross-posted at Mises Blog)