The damage done by intellectual property goes well beyond the prevention of the downloading of music. Yesterday's story about a Goldman Sachs employee downloading proprietary information was not exactly an example of a violation of intellectual property laws, but rather a theft of trade secrets -- perhaps a distinction without a difference.

Below, is a story about Toyota, supposedly benign force in the green economy by virtue of the Prius. Here is another side of the story in which Toyota is using intellectual property to make competition difficult.

One might be sympathetic to Toyota you were selling socks or toothpaste, but global warming seems to be too important to be gamed by such shenanigans.

Murphy, John. 2009. "Toyota Builds Thicket of Patents Around Hybrid To Block Competitors." Wall Street Journal (1 July): p. B 1.

"The Obama administration's tough new fuel-efficiency standards could pose problems for some car makers, but Toyota Motor Corp. is hoping to benefit. The Japanese company is betting the rules will give an advantage to its expanding lineup of hybrid vehicles, and it also aims to boost revenue by licensing to other car makers the patents that protect its fuel-saving technologies. Since it started developing the gas-electric Prius more than a decade ago, Toyota has kept its attorneys just as busy as its engineers, meticulously filing for patents on more than 2,000 systems and components for its best-selling hybrid. Its third-generation Prius, which hit showrooms in May, accounts for about half of those patents alone. Toyota's goal: to make it difficult for other auto makers to develop their own hybrids without seeking licensing from Toyota."

Is anybody here aware of the website, HarmfulPatents.org link here? It is a new ally in the fight against patent-based monopoly. Mike Masnick gets a hat tip for this one, in his site, link here. HarmfulPatents is run by a doctor-professor at Stanford, Dr. Robert Shafer. He had developed a database on HIV that is used to identify possible treatments. Then he and his university got sued by Advanced Biological Laboratories, a French firm which claims that its patents cover the use of computers to make diagnostic decisions. Stanford settled, but the doctor hasn't, starting the website and asking the patent office to re-examine and invalidate the patents. ABL's settlement with Stanford ends the suit against Dr Shafer and allows not-for-profit use of his database. Final irony in this outrage: the European Patent Office rejected the patents on the grounds they were obvious.

Elsevier is a publisher which now owns the rights to most academic journals. This has been a sore point in the academic community for a long time. In effect because of the way copyright works, they own the rights to a large fraction of existing scientific publications, as well as the names (and reputations) of journals. Their business model is one of squeezing libraries for high subscription prices usually for a package of journal, including one reputable one, and a lot that are not so much so. You can read about efforts by economists in general and Ted Berstrom in particular to end this situation here. There are two key points: first Elsevier makes articles expensive and difficult to access. Second, they recognize that they are a dying industry - the model of authors, editors and referees providing their services for free and Elsevier collecting from the libraries is obsolete now that redistribution is possible via the web. So (smartly from their point of view) they are squeezing out the last drops of blood. But it is worse than that - they apparently have a new business model in which they are paid by lobbyists to create fake journals to publish articles supporting the lobbyists point of view. You can find detail on the Economic Logic Blog,

Although they are working hard. Stephan points us to a list of libraries available online.

(via Steve Silberstein) One of the reason the patent system does not work more poorly than it does is that companies acquire large portfolios of patents that they hold over each others head, effectively neutralizing the patent system and letting everyone get on with the business of actually inventing useful stuff. The "patent trolls" or non-practicing entities (NPEs) have broken this system by creating firms that don't actually do anything except hold patents, so they are free to sue, without any threat of being counter sued. Patent Freedom is a web site devoted to tracking the trolls - they have a wealth of interesting information about them.

What is the next great wave of innovations? It is hard to know for sure, but over-the-air internet seems an obvious possibility. We observe the following facts

*Cell phone service is highly monopolistic and lousy.

*Over-the-air internet service has arrived - watch people with their iphones at the restaurant...

*Over-the-air internet service is lousy - watch how long it takes them to load a web page

This raises the question: what would really good over-the-air internet service do? Really high speed all the time everywhere over-the-air internet exists in laboratories all over the world. It is directional and frequency hopping and it cleverly gets around problems of interference, including that caused by other devices. The technology is there now. Why can't we have all the information in the world at our fingertips all the time? Think of all the great business opportunities - from revolutionizing markets for small businesses, to great new businesses, to the business of writing the software, building the small portable internet devices, to building the large radio networks needed to make the vision a reality. Expensive proprietary over-the-air networks revolutionized trucking and shipping. Why not revolutionize everything else? There is no question that there is huge opportunity here: for individual people to make their fortune, for the more average of us to make a living in a new and growing industry.

So what is keeping the vision from reality? Not enough support from the government? No - government is the problem. From dragging their feet on the allocation of "white space" spectrum, to delaying the introduction of HDTV, to the more fundamental problem of tying up massive amount of bandwidth with obsolete over the air television that provides minuscule benefits to practically nobody - government regulation is the culprit. We don't need "net neutrality" laws; we don't need government regulation of the airwaves - we need competition, hard and fierce and innovative.

And let us not forget patents and copyright. So much of the new technology is tied up with patents of course. But I'm especially reminded of a conversation I had with Gary Shapiro, President of the Consumer Electronic Association, who I met at a Cato conference several years ago. He represents mostly smaller electronics firms - exactly the ones who are eager to innovate and bring new products to market. What is their greatest fear? That competitors will steal their ideas if they don't tie them up with patents? Of course not. It is that they will be sued by copyright holders for somehow encouraging piracy. If you want to know what that is all about, go look up the case of Replay TV.

Finally - what does it take to succeed? The biggest success of the last decade is Google. Did they do this by trying to squelch the competition with legal means? No. They have a vision - all information at your fingertips all the time - and they've ruthlessly pursued that vision, necessarily bending and breaking copyright laws along the way. So...do we spend our time patenting elaborate business models? Or do we build better mousetraps?

I think it is time to start a campaign to free the airwaves. The time has come for inexpensive high quality access to everyone and everything all the time.

Glenn Thorpe brings to our attention an article by Matt Zimmerman about the Google settlement with the book authors. He points out that until now Google has pursued legal settlements that benefited everyone; this time the settlement benefits only them, leaving anyone else who would like to make fair use of copyright material in the lurch.

We argue a lot about patents on this blog. While software patents are pretty clearly harmful, for the most part they aren't enforced so don't make much difference. The big blockade to innovation these days seems to be the copyright tail wagging our dog.

via Svetoslav Trochev

Here is prime example that shows how the patents are 'promoting' the progress.

I guess the new BMW will have new option. "Paper map for North America"! :))

Thanks to Christian Zimmermann for keeping an eye on Economic Logic. They are blogging up a storm over patent abuse.

One of the biggest problems with the patent system - and to a lesser extent with copyright - is the use to try to tax other people's innovations by claiming a monopoly over something you didn't invent. This is the heart of what it means to be a patent troll (see the article below about banks), and why it blocks rather than promotes innovation. There is a nice posting about SCO on Economic Logic: the point is that SCO now exists as a company the sole purpose of which is to slow down progress by claiming IP rights over other people's inventions and creations.