An ars technica post, Study: free markets superior to patent monopolies, reports:

Our economic system is based on the expectation that markets can provide optimal solutions more efficiently than monopolies, with one glaring exception: patents, which are structured in a "winner takes all" manner. A study appearing in today's edition of Science suggests that markets might work here, too.

Now, I know, there are many problems with even evaluating an IP system on utilitarian grounds; but the purported innovation-spurring effects of an IP system are what its advocates usually claim in support of having it. So it's natural to ask: well, where's the proof? Never is it provided. Study after study concludes that an IP system's costs are about equal to, or greater than, any benefits it provides. (See my There's No Such Thing as a Free Patent; What are the Costs of the Patent System?.) So it's no wonder yet another study concludes this.

[Cross-posted at Mises Blog.]

Google Books On The iPhone and G1 Is Almost Kindle-Like (And Real Mobile Kindle May Be Coming Soon) rightly raves about about the mobile version of Google Books. It works great on an iPhone (and it turns out the rumors about Kindle coming to the iPhone were right; see also my LRC post Kindle v. Netbook v. ePub, Bookworm and Stanza).

However, it turns out that you can only see "free" google books in mobile site. For example, on my iPhone I cannot see the 1907 Edith Nesbit book The Enchanted Castle in the mobile-optimized version of Google Books. (Try it even from a regular browser, from that mobile site, you'll see what I mean.) However, if you go to the regular Google Books site, you can find and read the whole thing--even on an iPhone. You just can't use the mobile-optimized version of Google Books to view it--even on a computer. So you can read the book on an iPhone, but not in a mobile-optimized format.

I suspect that Google did this because of copyright concerns, as part of their deal with publishers--perhaps it made them carve out something for mobile phones or platforms. It's amazing how much copyright law distorts our entire economy.

[Cross-posted at Mises Blog.]

In this post, Monsanto's General Counsel disagrees with Google's Head of Patents and General Counsel, who had complained about the risks companies like Google face from huge damage awards in patent lawsuits.

I am so tired of patent lawyers and companies with vested interests making the tired old argument that we should not "weaken" patent protection because it's needed to promote and protect innovation--without ever once even alluding to the fact that these purported benefits have an accompanying cost, much less demonstrating that the cost is worth the benefit received. (See my There's No Such Thing as a Free Patent; What are the Costs of the Patent System?)

I'd much prefer simple, honest calls for protectionism: Monsanto wants patent protection to remain strong, because they think it benefits their own company--regardless of the overall effects or costs on other companies or the economy as a whole. Fine, an honest plea for redistribution of wealth.

Note how Monsant just brushes off Google's costs and fears:

"I respectfully disagree with the recent blog post by Google's Head of Patents and General Counsel, commenting on the perceived risks from damage awards in patent cases. Monsanto has faced billion dollar damage claims as a wrongly sued patent defendant and also knows the true benefits from avoiding the encouragement of willful infringement based on a smaller party's calculated gain in the face of limited risk of a meaningful award of damages if infringement is established. With full knowledge of all these issues and our substantial alignment with Google and the information technology industry over the legitimate need to curtail patent trolls and a myriad of other concerns - we encourage thoughtful reform."

Amazing that he just says he "disagrees" with Google's perception of risks from high damage awards in patent cases--even as it admits Monsanto has faced billion dollar damage claims in wrongful patent suits. Does it occur to this gentleman that perhaps not every company is comfortable facing the risk of wrongful billion dollar patent claims?

[Cross-posted at Mises Blog]

Developments abroad on intellectual property don't get a lot of attention in the US. South Korea, one of the most wired nations, has been the object of a good deal of official attention, but not much otherwise. While I was economic counselor in our embassy in the 70s, enforcing copyrights and patents was an uphill battle. Most of the offenders were small mom-and-pop operations and the policemen on the beat were reluctant to prosecute small sellers of software or knockoffs of branded clothing, etc. I argued that the Koreans would enforce IP when they had developed it and wanted to protect their property. Unfortunately in hindsight--I was charged with pushing for enforcement--I seem to have been right, as they are doing so now according to this story link here.

Under the headline, "Crackdown nabs 39 uploaders for digital theft"; the Korea Herald tells us that "digital theft is blamed for an annual loss of more than 2 trillion won ($1.34 billion) in South Korea, the world's most wired country, with nearly 20,000 files of copyrighted content circulating illegally last year alone;" that "the individuals charged last month were described as "heavy uploaders" who received money from internet service providers in return for posting more than 1,000 files on local peer-to-peer sites; that "twelve had been previously convicted of breaking copyright and computer program protection laws"; and that "last month, a court sentenced the chiefs of the country's four top internet service providers to one year in prison and a 30 million won fine for facilitating illegal distribution of copyrighted content.... the first time criminal charges had ever been brought."

Thirty years ago, I would have been happy to read this result of development, but now, only with regret. The opponents of monopoly are losing abroad as well as here.

The intellectual property farce goes on. Charge Notification Services Corporation is suing credit card company Visa for patent infringement when it uses SMS (short message service) to inform card holders that their cards have just been used link here.

Knowing that, I'm looking forward to patenting the use of mail, email, and the telephone to do so. The profit in this must be immense. Oh, obviousness? Is that a problem?

This sort of legal action is making a joke out of the system of granting patents and of the courts in enforcing them. Have the bureaucrats, lawyers and judges no shame or respect for their profession?

Patent Baristas has a Book Review of the new book Driving Innovation. It's interesting to me that patent lawyers seem to be beginning to begrudgingly acknowledge that the patent system has costs:

"The duality of intellectual property is that it is a source of wealth and a source of an equal and opposite cost. That is, IP brings wealth only through a hidden tax whether on competitors or consumers. So it is with IP rights, they inherently set up a tension between the pharmaceutical company enforcing rights and the patients wanting greater (read: less costly) access to medicine. A technology company wants to build and market a product but is forced to pay licensing fees to a patent holder."

What is bizarre here is the blithe assumption that the costs of IP are "equal and opposite" to its benefits. First, they can never be equal, due to the subjective, ordinal, and interpersonally incomparable nature of value. Second, even if they can be compared, there's no reason to think that they are equal--one is likely to be greater than the other. Third, even if you assume they are equal--then why have an IP system? I mean why even bother, if it all balances out? (See my There's No Such Thing as a Free Patent; What are the Costs of the Patent System?)

But even though they acknowledge the system has costs that might offset or even exceed the purported benefits, do they want to probe into whether IP is legitimate or should exist? No, explicitly not: "This book is not about what the IP should be or how it could be changed but is about how to survive in a global system when IP rights have developed."

Ah well, baby steps.

[Cross-posted at Mises Blog.]

David Post over at Volokh.com has an interesting discussion going on regarding how Microsoft's 'Songsmith' software is butting up against the limitations of copyright law.

I think the re-mixed Beatles song he links to is awful. But the Marvin Gaye remix is interesting and this Peter Gabriel Songsmith re-mix is sublime.

No I'm not talking about Bernie Madoff suing the people who invested with him...I'm talking about the RIAA. The story is here. I've warned repeatedly that the "media" industry - a pipsqueak little industry not even the size of the IBM Corporation, and controlling a grand 10% of the entertainment market - is the tail wagging the dog. Why? Because they threaten innovation in all industries. Their theory basically is: we want money, someone should give it to us. Unfortunately they have enough money to purchase Congress and the Supreme Court.

I missed this story when it appeared, but it seems to sum up the current patent situation so well, that it is worth revisiting now link here. Ryan Paul wrote it for Ars Technica as a review of a speech by Rob Tiller, Vice President and Assistant General Counsel at Red Hat, at the Southern California Linux Expo.

While the emphasis is on software patents, the same criticisms apply to the whole category. What to do? I do not expect us to be delivered of this plague by the courts with their seeming vested interest in perpetual litigation, also known as the full employment act for lawyers and judges. Congress and the White House then, are the only hope, a conclusion that Larry Lessig also reached. Talk to your representatives.

Brad Stone writes in the New York Times, following up on the Blount oped, that Amazon will allow copyright owners to decide whether to allow or prevent voice-rendering of the book on the Kindle 2 link here.

Here is the full text of Amazon's statement: "Kindle 2's experimental text-to-speech feature is legal: no copy is made, no derivative work is created, and no performance is being given. Furthermore, we ourselves are a major participant in the professionally narrated audiobooks business through our subsidiaries Audible and Brilliance. We believe text-to-speech will introduce new customers to the convenience of listening to books and thereby grow the professionally narrated audiobooks business. Customers tell us that with Kindle, they read more, and buy more books. We are passionate about bringing the benefits of modern technology to long-form reading." Nevertheless, we strongly believe many rights-holders will be more comfortable with the text-to-speech feature if they are in the driver's seat. Therefore, we are modifying our systems so that rightsholders can decide on a title by title basis whether they want text-to-speech enabled or disabled for any particular title. We have already begun to work on the technical changes required to give authors and publishers that choice. With this new level of control, publishers and authors will be able to decide for themselves whether it is in their commercial interests to leave text-to-speech enabled. We believe many will decide that it is. Customers tell us that with Kindle, they read more, and buy more books. We are passionate about bringing the benefits of modern technology to long-form reading."

Apparently the software on the Kindle will have to be altered, so it does not have immediate effect.

Amazon seems to be running from a potential fight. Too bad. It is de facto extending the power of copyright so that the owner is free to choose when he calculates it is not to his advantage. The consumer gets stuck again.

Since there are other book readers like the Kindle, it will be interesting to see if they go along with Amazon's decision. Is there a possible legal challenge here when Amazon allows copyright to be extended without either legislative or judicial justification?

After I initially posted this, I came across a long discussion on the legalities of this link here. That may help Amazon justify its decision to allow opt-in or -out. But the customer still gets cheated.