Just to give you an idea of how radical the IP maximalists have become, check out these excerpts from today's Supreme Court oral argument in the Bilksi case (which may help decide the scope of patent law in terms of what can or can not be patented):

JUSTICE GINSBURG: But you say you would say tax avoidance methods are covered, just as the process here is covered. So an estate plan, tax avoidance, how to resist a corporate takeover, how to choose a jury, all of those are patentable?

MR. JAKES: They are eligible for patenting as processes, assuming they meet the other statutory requirements.

JUSTICE BREYER: So that would mean that every -- every businessman -- perhaps not every, but every successful businessman typically has something. His firm wouldn't be successful if he didn't have anything that others didn't have. He thinks of a new way to organize. He thinks of a new thing to say on the telephone. He thinks of something. That's how he made his money. And your view would be -- and it's new, too, and it's useful, made him a fortune -- anything that helps any businessman succeed is patentable because we reduce it to a number of steps, explain it in general terms, file our application, granted?

MR. JAKES: It is potentially patentable, yes.

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JUSTICE BREYER: You know, I have a great, wonderful, really original method of teaching antitrust law, and it kept 80 percent of the students awake. They learned things.[Audience laughter.] It was fabulous. And I could probably have reduced it to a set of steps and other teachers could have followed it. That you are going to say is patentable, too?

MR. JAKES: Potentially.

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JUSTICE SCALIA: You know, you mention that there are all these -- these new areas that didn't exist in the past because of modern business and what-not, but there are also areas that existed in the past that don't exist today. Let's take training horses. Don't you think that -- that some people, horse whisperers or others, had some, you know, some insights into the best way to train horses? And that should have been patentable on your theory.

MR. JAKES: They might have, yes.

JUSTICE SCALIA: Well, why didn't anybody patent those things?

MR. JAKES: I think our economy was based on industrial process.

JUSTICE SCALIA: It was based on horses, for Pete's sake. You -- I would really have thought somebody would have patented that.

MR. JAKES: There are also issues with enforcement. I can't really answer why somebody wouldn't have. There are teaching methods that were patented. There are a number of them that we've included in our brief where there were patents issued for teaching methods, and I don't think that we've had a serious enforcement problem with people being sued for using teaching methods. But there have been those people who have sought to patent them rather than keep them as secrets or just use them.

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In the world view of the IP maximalist, even a method for "picking a jury" is patentable and subject to a monopoly. Imagine that you are a criminal defendant and your attorney has strategies for picking jurors that might be favorable to your arguments. Unfortunately however, another high-priced law firm which regularly makes large political donations and is located on the opposite coast has a "patent" on it. It refuses to let you choose the jurors in the manner you wish without forking over a fee which you can't afford (assuming they decide to license it to you at all....).

Very scary stuff.

The SCOTUSblog has its analysis regarding the crucial Bilski patent case that was hear before the Supreme Court today.

Read it here.

The good news: The impression seems to be that the Court is not prepared to let IP maximalists have their wish and be able to patent anything and everything under the sun.

The bad news: The Court still may decide rule on the case in a narrow fashion - refusing to inject the much needed broader reform that is so desperately needed.

PDF Transcript of the oral argument here.

Bloomberg.com cites this figure in its coverage which speaks volumes -

Applications for so-called business method patents have soared over the past decade, from 974 in fiscal 1997 to a peak of 14,364 in 2008, according to the U.S. Patent and Trademark Office.

The New York Times editorializes on patents today, in particular the application for one on a "method for hedging financial risk in energy trading" that is now before the Supreme Court link here.

It concludes, "Allowing an abstraction of this kind to be protected would take patent law too far."

Most of the argument misses the weakness of patents. Instead, it ends with "Patents perform a useful function, promoting innovation by ensuring inventors the right to profit from their creations for a period of time. But overprotection through patents is as dangerous as underprotection. It can stifle competition and infringe on the rights of non-patent holders. Not every bright idea should be protected as a property right."

The positive in this is that a main stream newspaper would question patents, observing the costs of overprotection except that it fails to mention that, in practice, they stifle innovation in contravention of the constitution.

However, those of us who have concluded that the whole system of patents and copyrights is systematically harmful and has to go, need to recognize that it is not going to happen by court cases, no matter how helpful. What is required is legislative change. That will require a political party, e.g., like Pirate Bay.

The victims of the Great Recession keep emerging from the carnage wrought by the big financial players. This one comes from the "retirement communities" link here. People buy into them thinking that all is well for their old age. It may not be, as a number of the companies had big plans to provide services they can no longer finance or have made guarantees on deposits that are now controlled by the contingencies in the fine print of their contracts. What seemed certain when the buyer signed up may no longer be so. The prospect is they will not recover until the economy, particularly employment, has recovered and new tenants can afford to buy into them.

From a post on Jurist:

Nokia's infringement suit against Apple illustrates need to scrap US patent system

Stephan Kinsella [General Counsel for Applied Optoelectronics and Editor of Libertarian Papers]: "A recent lawsuit filed by Nokia against Apple alleges that the iPhone infringes 10 of Nokia's patents. Nokia is probably "seeking between $200 and $400 million in damages from Apple," which JURIST characterizes as "a relatively low amount to seek from a company that expects revenues...of over $11 billion this year." It doesn't seem trivial to me, given that $400 million is a good chunk - say, 5 to 10% or so - of Apple's profits. And Nokia's is not the only lawsuit Apple faces. Half a billion here, half a billion there, and pretty soon you're talking real money. For other examples, see here.

This case is a good example of the waste caused by the patent system. The common justification for IP is that it increases innovation and overal societal wealth (see my article "There's No Such Thing as a Free Patent"). But study after study concludes otherwise (see my article "The Case Against IP: A Concise Guide," and my post "Yet Another Study Finds Patents Do Not Encourage Innovation"). Is this surprising? After all, the patent system undeniably imposes enormous costs on society - companies spend millions of dollars on patent attorneys' fees and salaries, patent filing fees, licensing fees, litigation fees, and so on. Is the value of the extra innovation that patent law stimulates greater than all these costs? Nobody knows for sure, but the various studies almost universally conclude no. Some studies even conclude that the patent system decreases overall innovation, meaning that that we are paying a huge cost just to have innovation impeded. Thus, as noted by Mike Masnick, "if you build anything even remotely innovative these days, you're going to get sued for patent infringement, probably multiple times. It's become a massive tax on innovation, rather than a lever for innovation."

Many patent lawyers and IP advocates begrudgingly admit that the system is broken, or at least needs significant improvement. As a senior partner in the patent department of a major national law firm wrote me:

Stephan, Your letter responding to Joe Hosteny's comments on Patent Trolls nicely states what I came to realize several years ago, namely, it is unclear that the US Patent System, as currently implemented, necessarily benefits society as a whole. Certainly, it has benefited [Hosteny] and his [partners] and several of their prominent clients, and has put Marshall, Texas on the map; but you really have to wonder if the "tax" placed on industry by the System (and its use of juries or lay judges to make the call on often highly complex technical issues that the parties' technical experts cannot agree on) is really worth it. Of course, anyone can point to a few start-up companies that, arguably, owe their successes to their patent portfolios; but over the last 35 years, I have observed what would appear to be an ever increasing number of meritless patents, issued by an understaffed and talent-challenged PTO examining group, being used to extract tribute from whole industries. I have had this discussion with a number of clients, including Asian clients, who have been forced to accept our Patent System and the "taxes" it imposes on them as the cost of doing business in the USA.

But I disagree that the patent system is broken, or malfunctioning at all. It benefits certain people and companies, as all taxes and regulations do. The beneficiaries of this government program defend it with various forms of propaganda. For example, they say that is a major cause of innovation and wealth - indeed, that it is necessary for innovation. But as noted above, there is no proof that patent systems generate net wealth. Another tactic is to call patent a property right - in particular an "intellectual property right." But calling it a property right does not make it so. In fact, as I have argued extensively - from the perspective of someone who is both as a practicing patent attorney familiar with the system and a libertarian who is a strong advocate of private property rights - patent rights are not genuine property rights. Patents are artificial privileges granted by the state that actually undermine private property rights. A patent is a government grant that gives the patent holder the right to tell others how they can use their own property, by vetoing certain uses. They can use this veto right to extort ransom payments, politely called licensing royalties today.

IP advocates often say that infringers "steal" ideas from the originators, to bolster their characterization of ideas and patterns as property. In fact, in the dispute at hand, as reported here, "Nokia said Apple has refused to pay for use of intellectual property developed by Nokia that lets handsets connect to third-generation, or 3G, wireless networks, as well as to wireless local area networks. 'Apple is attempting to get a free ride on the back of Nokia's innovation,' Ilkka Rahnasto, Nokia vice-president for legal and intellectual property, said in the statement." In other words, Nokia is trying to make it look like Apple copied Nokia's patented inventions, so that it looks more like a thief. But in a patent infringement lawsuit, the patentee does not need to prove copying. In fact, the infringer could have independently invented the technology, totally unaware of the patentee's invention, and still be liable. While Nokia here implies Apple is getting a "free ride" by using IP "developed by Nokia," you can bet that they will happily accept a win in court over Apple even if Apple is shown to have independently invented the technology.

And what is wrong with copying, anyway? This is how society and technolgy advances: by emulation, by learning. The free market thrives on competition and cooperation, and also on emulation and imitation. Every stage of technology is built on the body of knowledge developed over the centuries. Emulation and the acquisition of knowledge play a key role - are essential to - society and economy. Nokia's own technology was not developed in vacuo. There is nothing wrong with imitation. It is part of the market. It is essential to progress. It is no more theft than learning is. In fact, IP can be a barrier to learning, and even lead to censorship.

So, no, the patent system should not be reformed. It should be abolished, for the sake of freedom, private property rights and prosperity.

For further elaboration of the ideas expressed in this post, see my monograph Against Intellectual Property, my article "The Case Against IP: A Concise Guide," and other material on my website."

Update: see Intel Will Pay $1.25 Billion to Settle Disputes With Rival, reporting: "Ending the computer industry's most bitter legal war, the chip maker Intel agreed on Thursday to pay a rival, Advanced Micro Devices, $1.25 billion to settle antitrust and patent disputes."

$1.25 billion in wealth transferred, and untold hundreds of millions spent on litigation, patent acquisition, losses due to strategic adjustments in response to antitrust and patent law ... Yet another example of how the central state's artificial legislative patent and antitrust schemes do nothing but destroy and waste wealth. Well, not only that--they also enrich certain classes who parasitically benefit from the system, e.g. patent lawyers, litigators, and large companies.

I heard about this first from Richard Corsale who directs us to this article about the ACTA. The highlights? Three strikes and you are out...the music companies would get to shut down anybody for any reason...The entire "negotiation" - read big media wish list - taking place under the guise of "secrecy for national security."

Yet in Europe we have this - an internet users rights bill that explicitly rejects three strikes and you are out. I'll take this as a reliable summary of the situation

Christian Engstrom, a lawmaker from Sweden's Pirate Party, said the revised bill was somewhat of a victory for file-sharers, but warned that the EU assembly would have to keep a close eye on member states that want to cut off Internet users for online pirating.

The bottom line: the weasels continue to weasel and every time they come into the light we have to whack them again.

The cool, hip techno-pundits are usually reliably Obama-liberal/libertarian-lite types. A bit California-smug, engineer-scientistic, anti-principle, anti-"extreme." But okay overall. A soft, tolerant, whitebread bunch.

On the last This Week in Tech, I was pleasantly surprised to hear the always interesting Jason Calacanis voice support for nuclear power; and even more surprised to hear soft-liberal host Leo Laporte echo mild agreement with this. Good for them!

But then they had to revert to form when they, along with Natali Del Conte and Patrick Norton expressed unanimous disapproval of McCain's Internet Freedom Act, since they are all--"of course"--in favor of net neutrality rules imposed by the FCC. McCain's proposed statute would block the FCC's proposed net neutrality rules, which would forbid network providers (e.g. cable companies, telcos, and wireless carriers) from selectively blocking certain types of Internet use.

Got that? The techno-pundits are against regulation (by cable companies) ... so they favor regulation (by the FCC) of the cable companies ... so they oppose government legislation regulating a government agency. They sit there fuming about how disgusting McCain's draft legislation is. So they see that the state is terrible. Yet it doesn't occur to them that it might be a bad idea to trust the government to oversee the Internet. They are against regulation of the Internet, so they support ceding power to the government to ... decide how and whether the Internet should be regulated. It doesn't occur to them that we should simply favor property rights, individual freedom, and the free market. The closest any of them come to this position is John Dvorak, who has a libertarian and contrarian streak, and who often observes on TWIT that there's nothing wrong with tiered pricing--charging more for a fatter pipe, etc.

Is "no regulation of network providers" the libertarian position? It clearly would be if the network providers were purely private. In the libertarian view private property owners determine how their property may be used. There is no "right" to access the Internet. A private network provider ought to be able to offer service on whatever terms he wants; and consumers to accept or reject it. Tiered services, deep packet inspection, prohibition of certain types of uses or even certain types of content--that's up to the providers and customers and whatever deal they agree to. We libertarians believe in "capitalist acts between consenting adults," to use Nozick's phrase (see Rothbard's earlier formulation).

But because of various degrees of corporatism--state favors and protectionism, tax funding of infrastructure, etc.--the service providers are arguably not 100% private. But the solution is not to regard them as essentially part of the state and thus fair game for regulation, but to pair our call for no state regulation of the Internet (no net neutrality regulations) with a call for the abolition of all forms of corporatism, such as various laws that work out protecting larger companies (tax funded subsidies, IP law, wage and hour legislation, mandatory worker benefits, labor union legislation, minimum wage, incorporation statutes [note: this does not mean I think that limited liability is a privilege conferred by the state on corporations], and so on).

This is my take, anyway. I am not aware of much informed libertarian analysis on the net neutrality issue. Kevin Carson pointed me to Jim Lippard as "one of the better libertarian writers on net neutrality"--I'll have to take a deeper look, but from a quick glance I'm not sure he's a libertarian; here he writes, e.g., "providers shouldn't be able to block access to competitors' services"--should be able? This seems to presuppose the legitimacy of an overarching state regulation, which is certainly not libertarian.

Update: Leo Laporte must have gotten a lot of flak in the past week for supporting the FCC imposing net neutrality rules on Internet network providers. In TWIT 220, he expresses genuine concern with this. And he seems to get that the issue is not what rules the FCC should impose--which most of his technocratic guests in that episode focus on--but the issue of the danger of empowering the state itself to regulate at all. Most of the panelists at least seem leery of state regulation, but are concerned there is not enough competition in the network provider industry to ensure self-regulation. This concern is understandable, but the pundits should pause to ask: what is the state's role in causing the industry to be the way it is? In addition to being leery of state regulation of the Internet, they should oppose state policies that subsidize and prop up large companies or reduce competition; one of them even brings up the issue of how utilities are given monopoly status by municipalities. So they are almost there. It might help if we libertarians could elaborate the various state regulations and laws that have given current network providers more market power than they would have on a truly free market--taxes, minimum wage laws, implicit and explicit subsidies, the legacy of government-granted monopolies, pro-union legislation, and various other regulations that disproportionately shackle and hamper smaller companies and potential competitors; regulations that help the existing, larger companies by increasing barriers to entry into that field; state taxes, IP laws, and regulations that stifle dynamic change, innovation, and competition.

Laporte also mentions some kind of split on this issue among EFF board members. I looked at the EFF site and can't find much explicit about net neutrality--no categories, etc. They seem to be trying to keep a low profile on this issue, maybe because they have some pro-state-regulation board members. I did find this recent EFF article by Corynne Mcsherry, "Is Net Neutrality a FCC Trojan Horse?," which expresses the concern that if the FCC just grabs "ancillary jursidiction" to impose net neutrality regulations, who knows what other regulatory powers it might just unilaterally decide to assme the power to impose regulations pursuant to an "Internet Decency Statement." But though McSherry here seems to display healthy skepticism of state regulation, she is obviously trying to leave open the door that some state regulation of network providers might be favored by EFF: e.g., McSherry writes, "If 'ancillary jurisdiction' is enough for net neutrality regulations (something we might like) today, it could just as easily be invoked tomorrow for any other Internet regulation that the FCC dreams up (including things we won't like)." Note the bolded language. And she notes that one possible solution to the FCC's "ancillary jurisdiction" power grab is: "Congress could limit the FCC's power by authorizing to regulate only to ensure network neutrality."

The EFF, if it is to remain principled and a proponent of individual, Internet-related freedoms and "digital rights," must be clear on the enemy of such rights: the state. The moment EFF supports any state agency's regulation of private companies or the Internet, they have succumbed to their leftist confusions and statist sympathies and become worthless as principled defenders of individual freedom.

[Mises blog cross-post; SK cross-post]

Excellent post by Kevin Carson, Gene Quinn: Patent Twit of the Week, criticizing patent attorney-shill Gene Quinn's "arguments" for patents.

The News Hour Monday had an interview with Ken Rogoff and Carmine Reinhart, authors of This Time Is Different and you can still see the video or download the transcript here. Its conclusions are sobering:

Our current crisis is like all the others studied over an 800 year span. They all result from ignorance (of the past) and from the mistaken belief that this time is different. The crises are made up of ballooning housing and equity prices, staggering borrowing from abroad, slowing economic growth, deregulation, and a mountain of short term debt.

These were the common features of financial crises of Asia in the 90s, of Latin America in the 80s, on Wall Street in 1907, in Germany in 1873, in the Mississippi bubble of 1720, and the 1340 Florence collapse. The current decline on Wall Street from peak to bottom was average, 35%, as was that in housing prices. The recovery so far has been typical of the past, when on average, stocks went back to their peak in two to three years while unemployment took two years to reach a bottom and five more to reach the pre-crisis level. Governments double their debt in three years, historically followed by defaults too numerous to mention.

If we examine the US response to the current crisis, we are not doing very well in either our diagnosis or our repairs to break the mold.