As I noted in The Schizo Feds: Patent Monopolies and the FTC, the state grants patent monopolies and then uses antitrust law to attack the beneficiaries of those monopolies. As one commentator noted in a related thread, "It is amusing, watching one agency of government applying a system whose entire purpose is the creation of monopolies, and then another agency tasked with preventing monopolies turning up and trying to do something about it." A case in point is the flack about the Cipro drug where the state whines about the prices charged for Cipro during the anthrax scare a few years back and threatened to choke back on the patent monopoly it had granted for it. The state is schizo in many other ways too, of course--it foisted MTBE (a gasoline additive) on the country and then, years later, after fears of groundwater contamination, mandated that MTBE be phased out (I'm sure that the lobbying of ADM for ethanol to be used instead had nothing to do with that).

I previously noted the Rambus v. FTC case. Rambus was part of a standards-setting organization "working on standardization of DRAM chips." As a court later summarized this,

After lengthy proceedings, the Federal Trade Commission determined that Rambus, while participating in the standard-setting process, deceptively failed to disclose to the [standards-setting organization] SSO the patent interests it held in four technologies that were standardized. Those interests ranged from issued patents, to pending patent applications, to plans to amend those patent applications to add new claims.... Finding this conduct monopolistic and in violation of § 2 of the Sherman Act, ... the Commission went on to hold that Rambus had engaged in an unfair method of competition and unfair or deceptive acts or practices prohibited by § 5(a) of the Federal Trade Commission Act.

The FTC then sought to compel Rambus to license its patents at "reasonable royalty rates." Rambus appealed to the U.S. Court of Appeals for the DC Circuit and, in April, won its appeal, clearing the way for Rambus to try to extract maximum royalties from its former partners.

The FTC has filed a petition for rehearing. Skip Oliva has filed an amicus brief opposing the FTC's petition. Now I agree with Oliva that it's troubling when the state formulates new theories of antitrust liability. But from the libertarian view, the patent system and the FTC are all just internal parts of the state. So under the result favored by the FTC, what we really have is the state granting a slightly more limited patent monopoly to Rambus (that is, a patent for which only state-approved "reasonable royalty" rates may be charged) than is normally granted. I don't see what all the hubbub is about. What the state giveth, the state taketh away.

My view is that anything that chokes back the state-granted patent monopoly is, ceteris paribus, to be favored. And I agree with the general idea that it is detestable for a company to secretly seek patents on the technology of the SSO the company is part of, and that these patents should not be enforceable. The default contractual rule should be that if you work with others to adopt a technological standard, you implicitly agree not to use state-granted patent monopolies on that technology to block or extract royalties from use of that standard. I would say that derogation from this default rule should be explicitly spelled out. Imagine what response you would get from other SSO members if you try to add a clause saying that you may secretly apply for patents and enforce them against other members or companies using the standard.

[cross-posted at Mises blog]

The Supreme Court ruled unanimously that the patent exhaustion doctrine applies to so-called 'method patents'. Read the decision here.

A company (LGE) bought up a bunch of patent portfolios (As is often the case, such companies contribute nothing to actual inventions - they merely buy up existing monopoly rights). The patents in question do not involve tangible inventions, but rather a 'process' relating to computer operations. These 'process' inventions are known as 'method patents'.(I have always felt that the entire concept of 'method patents' to be suspect, but that is a discussion for another post.)

LGE licensed its patents to Intel in order to allow Intel to make and sell microprocessors using the LGE method patents. A third party (Quanta), then purchased the microprocessors from Intel to manufacture their own computers using Intel chips. LGE then sued Quanta - arguing that they (Quanta) somehow violated LGE's patents. Got that?

Only one word to describe the claim: Surreal.

Fortunately, the Supreme Court saw through the nonsense and unanimously agreed that there was no patent infringement here.

Its a bit wonky, with lots of legalese, but the decision is worth reading for those who want to know the nitty-gritty insanity of our patent laws. LGE even had the cojones to argue that the patent exhaustion doctrine doesn't apply to method patents.

It is only being done in small increments, but the Supreme Court is slowly restoring some sanity back to attempts at patent law overreach.

More at Patently-O here.

More details on the case at the ScotusWiki here.

AP weighs in with case coverage here.

This will be an important case - one that the Supreme Court may take a close look at, depending on how things shake out with the final decision.

Volokh and Patently-O have the details and related thoughts.

From Boing Boing: Oregon considers that its laws are copyrighted, thus you cannot reproduce them. The problem stems here from websites that reproduce Oregon laws in full. It may make some sense to make sure that there is only one version of laws out, so as to avoid confusion. The Oregon State Government website, however, has apparently half a million HTML errors and does not satisfy criteria for accessibility. Thus, non-profit, independent operators jumped in.

Oregon holds that illicit replication would impact its own sales of laws. In other words, Oregon wants a monopoly, and it is apparently already providing the good quality that comes with it.

Even if it doesn't, this article offers further proof of just how thoroughly corrupt our current patent system is.

via Christian Zimmermann...ebay pays cold cash to be able to put a hot button called "Buy it Now" on its auctions link here

Via slashdot, a letter in the Los Angeles Times by Dallas Weaver raises an interesting point. While propogandists for the copyight and patent mills are eager to have their exclusive grants treated as "property" they don't seem terribly interested in paying property tax. Since they've successfully managed to press the term "intellectual property" into the dictionary, why not charge them a property tax? This is a serious suggestion with serious benefits for two reasons.

First, it would go a long way to solving the problem of automatic copyright and orphan works - it would force copyright holders to emerge from the shadows or give up their copyrights. Moreover, it would get around some ridiculous language in the Berne convention to the effect that "The enjoyment and the exercise of these rights shall not be subject to any formality." It's not that you wouldn't get your rights if you didn't pay your property tax, any more than you would if you didn't pay property tax on your car. You would of course go to jail.

Second, owners of houses and automobiles and the like pay taxes on their property in exchange for real government services they receive ranging from roads to police. So also with owners of "intellectual property" who receive a variety of government enforcement services - which at the current time they do not help to pay for.

The Federal Court of Appeal in charge of interpreting Patent Law has been an absolute disgrace. I would have thought that it should be obvious that only tangible technology could be eligible for a patent under the law. But the court has at times implied that even modes of thought and communication can somehow be patented if it leads to concrete results in the physical world. Maybe they are slowly staring to get the message of just how wrong they have been all along.

The U.S. Court of Appeals for the Federal Circuit redefined the margins of patent eligibility in State Street Bank & Trust Co. v. Signature Financial Group Inc. in 1998. The effect was to boost patent protection for business methods, such as financial models, contract provisions, insurance policy features, computer-related inventions and Internet startups.

There were unintended effects, too. The U.S. Patent and Trademark Office was deluged with new patent applications and had few examiners with the expertise to handle them. Four Supreme Court justices have bemoaned the precedent, calling it vague and contrary. And several financial-services companies, frequent targets of the business-method-patent holder, have run up millions and in some cases billions of dollars in royalties and damages.

After a decade of disagreement over the precedent's bearing on American innovation, the Federal Circuit decided Feb. 15 to revisit State Street through the lens of another case, In re Bilski, which lifts State Street's holding on business methods and attempts to carry it further.

In a rare move, the court scheduled an en banc hearing without prompting by the parties in the case. The hearing is set for May 8.

Read the whole thing here.

Interesting reading here.

[Hat-tip: Supreme Court blog.]

I earlier suggested that if defendant Jammie Thomas was hit for over $3-million in fines for downloading music, she would have a good shot at challenging the verdict in constitutional grounds.

Her attorneys have decided to still challenge the $222,000 verdict on the same grounds. [PDF alert. h/t: Wired.com].

Good luck to her!