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Browsing posts in: Intellectual property

Innovation in television held back by television companies, not technology

Much of the technology hype these days surrounds reinventing television. Apple has long been suspected of designing a unique television experience. Samsung and other hardware makers have already launched so-called smart TVs. The goal of smart TVs is admirable – to improve the television watching user experience, something technology companies like Apple excel at. But unfortunately, these smart TVs are not yet better experiences. The may have Netflix and other apps built in, but often they are just portals to select web services with even fewer options. What’s more unfortunate is improving the television experience is simple and obvious, yet is no where closer to being implemented. That’s because the television companies do not want a better experience.

Consider Aereo, a technology start-up attempting to compromise copyright law with useful television viewing service over the internet. Aereo will install an antenna for every subscribing user and stream them broadcast television for a monthly fee.  Their argument is it is legal to freely access broadcast television with an antenna, they just change the location of the antenna. So far the courts have upheld Aereo’s claim, which has led News Corp. COO Chase Carey threatens he may pull all Fox channels to cable. Aereo’s incredibly inefficient and costly process of offering consumers a useful product is met with legal attacks and innovation crushing tactics by the television companies.

What does this better experience look like? Well, simply, on-demand television. Let us watch the shows we want when we want to watch them. The whole concept of a TV schedule is archaic in the age of YouTube and Netflix. Rumors claim both Apple and Google have lobbied television companies to allow there shows to appear on new TV platforms, but for TV companies, the money is just too significant under the current regime for them to risk changing it.

Because television companies refuse to move toward an on-demand type model, the television experience remains sub-optimal. Television requires following someone else’s schedule (or using expensive DVR equipment), paying extremely high cable fees for channels you don’t want, and not being able to view content across multiple devices. We have wi-fi and 4g data, but never few ways to watch television over them.

Incumbent companies are able to block innovation and new business opportunities in order to protect their own profits; profits that partially result from using free, public airwaves.  Copyright and intellectual property are supposed to be encouraging innovation, yet time and time again we see the established companies using their entrenched positions to limit consumer choice and prevent innovation.  So consumers continue to over pay for flawed products, not what capitalism and competition are supposed to be about.

Newegg saves money by standing up to patent bullies

Patent lawsuits have become the norm in almost every business, from technology start-ups to retail. Patent trolls, or non-practicing entities, makes tons of money by suing dozens of companies over often overly broad or extremely obvious patents.  Many companies settle these suits because of how expensive a drawn out lawsuit can be.

Online retailer Newegg took a stand, stating in 2007 to never settle with patent trolls.  This strategy has been deemed a success.

Soverain Software, a company without any products, happens to own patents cover basic functionality of online shopping carts (5,715,314, 5,909,492 and7,272,639), which they purchased from another company. They decided to sue a range of companies from Nordstrom’s to RadioShack.  Many settled. Some faced million dollar verdicts and ongoing royalty payments. Newegg, even after losing in district court (in East Texas, a common venue for patent trolls), appealed and has managed to invalidate these patents, meaning Soverain cannot sue more companies and cannot even collect on payments from other judgments in their favor. 

Newegg is so impressive because of their unwillingness to settle.  Newegg noticed that settling with one, only invited more to sue.  By showing themselves willing to fight back, especially if they can win, might deter other trolls.

Sadly, Newegg’s strategy, while successful this instance, isn’t enough to stop this strangle on innovation.  Start-ups and small companies do not have the legal team or money to burn to endure a drawn out lawsuit, which is often why especially small companies settle.  Newegg claims they still receive threats over patent lawsuits, including four companies claiming ownership over some part of the search box.  Until Congress and the courts can return some fairness to the system, innovation will be stifled and money will be wasted on lawyers and trolls.

Naming “Best of” subjects Yelp to lawsuit from Village Voice

Helping people discover great places to visit and eat has grown into a popular business. Websites and apps enjoy promoting the “Best of” a specific location. Village Voice holds trademarks on “Best of San Francisco”, “Best of Seattle", and several other best of cities and has chosen to sue competitor Yelp for using Best of language on its website.

Last year, the Village Voice sued Time Out New York for using “Best of NYC”. Time Out counter-sued claiming “Best of” is generic and should not be able to be trademarked. In April 2012, Village Voice and Time Out reached an undisclosed settlement (registration required).

More and more we are seeing companies and individuals bullying others from using basic language and ideas, both of which defenders of intellectual property will claim can’t be limited by intellectual property.  “Best of” is completely generic and has been used in books and magazines for decades. Village Voice, in fact, only registered its trademark “Best of NYC” in 2007.  This is a trademark that should never have been approved.  And Time Out not fighting the case just goes to show how easy it is to bully even sizeable companies with frivolous IP lawsuits. It will almost always be cheaper to settle than to fight in court.  Even if Time Out or Yelp were willing to fight to get the trademark invalidated, its unlikely they could recoup legal fees.  Why spend millions just to prevent the company from suing another competitor? If Yelp decides to settle, that just leaves Village Voice armed to sue more magazines, books, and websites. The “Best of” the web, all vulnerable to a company scared of some competition.


Midnight in Paris film sued over line from Faulkner novel – Updated

Woody Allen film Midnight in Paris has been sued for copyright infringement over a single line in the movie. Faulkner Literary Rights, the company that owns the copyright to author William Faulkner’s writings, including novel The Sound and the Fury, says the line from Requiem For a Nun was used without permission and is seeking unspecified damages.

In the film, the line said is: "The past is not dead! Actually, it’s not even past. You know who said that? Faulkner. And he was right. And I met him, too. I ran into him at a dinner party." The only appropriation from the book is  ten words: "The past is never dead! Actually, it’s not even past.”

This is certainly a case of fair use.  The line, which is cited to Faulkner in the script (even though that is not a requirement for fair use), is few words from a 286 page novel, far from threating the commercial value of the book. Rather, Allen citing the line can increase the commercial value of the book, introducing people to a new Faulkner book.

Unfortunately, fair use is a defense that must be made in court. This means significant court costs for Sony Picture Classics, the studio behind Midnight in Paris, just to prove they did nothing wrong.  Faulkner Literary Rights, further, does not need to prove their commercial value has been hurt. Simply the act of copyright infringement, even if it was to the holder’s benefit, can cost hundred of thousands of dollars in damages.  The result, most likely, is Sony will settle, paying a settlement in order to save on court costs.  All over ten words.

Updated 10-26-12 1:01pm – Clarified that the quote in the film was actually slightly different from the book, changing never to not.  It’s not necessarily a transformative change, but still, shows how silly this lawsuit is.

Apple versus Samsung: Patent monopoly versus antitrust

Patents are already government granted monopolies. Though we normally think of monopolies as bad things, patents (and copyright) are nothing but exclusive power over a specific item or area or expression, allowing the patent holder to charge whatever they choose or withhold the technology or expression.

In some cases, when one or many patents cover a set technology, standard licensing agreements are set up, otherwise it would be too expensive or time consuming for a new business to negotiate all the licenses needs. These standards, however, are a band-aid to try to remedy problem that patents are hampering innovation. This type of licensing agreement covers everything from ethernet cables to web video encoding.

Absent these licensing agreements, lawsuits run rampant. Apple and Samsung are tied in a global legal battle over patents, trade dress, and other legal issues. Like most patent cases, Apple sued Samsung over patents, so Samsung sued back over its own patents. Each has filed lawsuits in the U.S., Australia, and several European countries, 10 countries in all so far, with each battle playing out on its own (and costing each company millions of dollars).

European authorities are now investigating Samsung for antitrust violates related to its patent licensing, specifically against commitments to license patents related to mobile phone technology.

The EU is accusing Samsung of antitrust violations over its government granted monopoly.

If the EU is worried about anti-competition activities, why is it granting these patents in the first place? The main function of the patent is to block others from using that technology without the patent holder’s permission. Companies form these patent licensing agreements in order to protect themselves while still blocking out competitors not included in the licensing agreements. I don’t have the specific details of Samsung’s 1998 agreement. There are agreements that because of a technology’s standardization, like some mobile technologies, that companies are required to license their patents. But again, I ask, why give them the patent? If some technology has become so standard and widespread, was it really non-obvious when first developed? Or is it something so simple, everyone working in that space knew they needed the same thing and all invented it separately (which is usually the case).

Instead of asking whether Samsung and Apple’s patents are truly non-obvious and needed to encourage innovation, the EU wants to create a more complex set of laws with antitrust that make it even harder to innovation and gives more money to lawyers.

Patent lawsuit over smart thermostat

Amid all the patent lawsuits around mobile phones, is easy to forget just how mundane patent lawsuits can get, yet still affect our daily lives.  Nest, the makers of a critically acclaimed smart thermostat, is the target of a lawsuit from Honeywell, a long time thermostat manufacturer.

Created by one of the original designers of the iPod, Nest’s thermostat learns user habits to automatically change the temperature, has an auto-away feature, and scans the thermal decay of your house to save energy. The patent lawsuit, which includes retailer Best Buy as a defendant (even though Best Buy does nothing but sell the product), lists several patents Nest allegedly infringes:

  • U.S. Patent No. 7,634,504 – "Natural Language Installer Set Up for Controller"
  • U.S. Patent No. 7,142,948 – "Controller Interface with Dynamic Schedule Display"
  • U.S. Patent No. 7,584,899 – "HVAC Controller"
  • U.S. Patent No. 7,159,789 – "Thermostat with Mechanical User Interface"
  • U.S. Patent No. 7,159,790 – "Thermostat with Offset Drive"
  • U.S. Patent No. 7,476,988 – "Power Stealing Control Devices"
  • U.S. Patent No. 6,975,958 – "Profile Based Method for Deriving a Temperature Setpoint Using a ‘Delta’ Based On Cross-Indexing a Received Price-Point Level Signal."

Honeywell actually invented a smart thermostat almost 20 years ago and has since sat on the technology. “We found that consumers prefer to control the thermostat, rather than being controlled by the thermostat,” said Honeywell’s president of environmental and combustion controls division Beth Wozniak.

Honeywell, instead of innovating on a new technology, did nothing with it.  That is not the intention of the patent system. Patents are supposed to “promote the progress of useful arts and sciences.” When Nest releases an exciting new device, Honeywell sues trying to block the innovation.  Thermostats are far from a highlight of interior decorating, but they serve an important function in a household.  The more technology we lock up in patents that go unused, the slower we’ll discover new functions to make our lives easier and more efficient.

How Shakespeare shows copyright’s irrelevance

The newest salvo against piracy and copyright infringement comes from the Authors Guild’s executive director Paul Aiken and board member James Shapiro, two people who should have a better understand of Shakespeare.

The two, in their New York Times op-ed, claim Shakespeare would not have survived the internet because of piracy.  Shakespeare benefits from “cultural paywalls” they claim.

By the time Shakespeare turned to writing, these “cultural paywalls” were abundant in London: workers holding moneyboxes (bearing the distinctive knobs found by the archaeologists) stood at the entrances of a growing number of outdoor playhouses, collecting a penny for admission.

These cultural paywalls sound like theater tickets.

Aiken and Shapiro try to claim cultural paywalls and copyright are the same thing.  Let’s remember Shakespeare predated copyright law by almost 150 years.  Shakespeare himself pirated and copied from others extensively to write his famous plays. It’s rather copyright that would have prevented Shakespeare from writing Hamlet, Merchant of Venice, and Romeo and Juliet, all of which were adaptations of other works. King Lear was compiled from about half a dozen sources according to Groklaw.

Also, Shakespeare made sure to sell scarce goods – theater tickets – rather than relying on artificial scarcity to sell infinite goods – the script itself.

Though as I’ve shown before, Shakespeare does pretty well in the internet age.  Shakespeare is the most filmed writer with more than 420 films and more than 5,500 publications in 2010 alone.  Yet all of Shakespeare’s works can be found free online (legally) and as free ebooks. Yet many still pay to see his plays, watch his movies, and read his plays. There are more than 90,000 YouTube videos related to Shakespeare which yes, includes copyrighted movies, but also plays, remixes, and unique interpretations of that Bard the could not have been shared as easily and as widely if not for the internet.  MIT even held a forum on remixing Shakespeare in 2007.

Because Shakespeare’s work is in the public domain, anyone can do anything with it.  Shakespeare made a good living in the 16th century on his plays – he did not need copyright to incentives his prolific works – he found a business model that works, selling theater tickets, and found that to be more than enough incentive.  Copyright would have impeded his creations, almost all of which were copied and innovated upon by Shakespeare. That’s how creation works. It’s a constant give and take.  Cultural paywalls prevent this – not enable it. I think the better question is, could Shakespeare have survived having the Authors Guild representing him with such a flawed understanding of economics and history?

Censorship in the name of copyright infringement – Updated

Google announced this week that it will begin censoring  “piracy-related terms” from its Instant Search feature.  Now, when you type a movie or album name into Google Search, it will not longer suggest terms like BitTorrent, Rapidshare, or Megaupload.  Google’s Instant Search algorithm likely found these piracy-related searches popular enough to place their terminology higher than official information on the content.  By censoring its term suggestions, Google avoided likely grandstanding from the content industry claiming Google was sanctioning copyright infringement.

As a private company, Google has every right to censor or limit itself product as it sees fit. What’s unfortunate is we are finding ourselves more accepting of censorship in the name of copyright infringement.  Google, often professing a love for freedom of information, is censoring access to legal software and being arbitrary about it.  uTorrent is blocks, but BitComet is fine.  Rapidshare is blocked, but Mediafire is okay.  Remember, BitTorrent and file-sharing lockers are not illegal, even if they can be used for piracy.  Nothing stops users from typing in these words and searching for them manually (the censorship only applies to Google’s Instant Search suggestions).  But it’s a slippery slope that we are sliding further down.

The government confiscates domain names without due process, courts can ban books, and now Google has no issue censoring its search suggests, all in the name of copyright infringement.  Oh, so how has any of this stopped piracy?

UPDATED – Another 51 domains have been taken down, in a joint effort by the MPAA and Dutch equivalent, BRIEN.  It’s uncertain if the domains were actually confiscated by the government like in previous cases or if these were just DMCA takedowns.

ACTA fully leaked; USTR now wants to release it

A few weeks ago, the entire draft of the ACTA leaked with some scary proposals that would severely limit individual privacy, consumer rights, and online freedom.

The U.S. Trade Representative, who has been pushing for the ACTA’s secrecy all this time, has promised that the trade agreement will do nothing to change U.S. law. But this is a blatant lie. Trade agreements like WIPO and TRIPPS were used in the past to bypass public debate since the receive less attention that actual legislation. Once these trade agreements are passed, lobbyists claim each country must change its laws in order to comply with their international obligations. ACTA is even more creative by calling it an executive agreement. And now that the entire draft has been leaked, the USTR says its willing to release it.

I’ve gone over a bit of the ACTA, but now the full document verifies many of the fears I and others have had about the agreement.  The draft includes proposals for borders searches of iPods (without probable cause), secondary liability for infringement without safe harbors or exceptions, making Google and eBay pretty much illegal and even forcing your ISP to be liability for anything its users do online. The ACTA even allows for injunctions to prevent “imminent infringement”. Yes, Minority Report style pre-crime prevention is coming to intellectual property first. Also, there would be no more due process for online anonymity and intellectual property cases get special priority within the court system while also evolving intellectual property crimes from a civil issue to a criminal offence. This means rather than being sued by the effected party, the government becomes a free police service for corporations. The U.S. doesn’t need the ACTA for this. Thanks to the PRO-IP law, our Department of Justice already prioritizes copyright infringement over less important crimes like identity fraud.

Slowly, public officials are noticing the lack of transparency and dangerous provisions in the trade agreement.  The E.U. Parliament voted 663-13 against the ACTA, but this hasn’t stopped the negotiations from continuing. President Obama, unfortunately, remains a strong supporter of the ACTA.

Don’t worry entertainment industry: United Kingdom here to save you

With almost no debate and minor opposition, the United Kingdom passed the Digital Economy Bill which is pretty much a wish list from the entertainment industry looking to trample over individual’s rights in order to prop up their obsolete business models.

The Digital Economy Bill includes a “three-strikes” type provision to ban copyright infringers from the internet, based on accusations from copyright holders, not the courts. This will also make open wireless networks impossible as the law holds the owner of the signal responsible for any infringement.  Let’s ignore the research that shows the costs of forcing ISPs to police their uses costs more than the already inflated lost revenue from the entertainment industry.

The law was pushed though the UK Parliament using a system called wash-up that avoided most of the debate and scrutiny a law would normally receive. Of course, let’s not forget Lord Peter Mandelson personally helped orchestra this law after having a ritzy dinner with the head of the MPAA (that hasn’t stopped Mandelson from infringing on others’ copyrights).

So ISPs are now legally forced to basically subsided entertainment companies who are unwilling to recognize changes in the marketplace.  Nothing in this bill reveals why people will suddenly start paying for content.  Rather, these laws only push file-sharing and piracy into more fragmented and underground areas making them even harder to track.