Billions lost to patent trolls; US White House asks for comments on intellectual property (IP) enforcement; and more on IP

It becomes clear after a time that science, intellectual property (patents, copyright, and trademarks), and business interests are intimately linked which is why I include items on the topic of intellectual property (where I am developing some strong opinions). As for business topics, I am more neutral as my understanding of business is quite limited.

All of this is to explain why I’m taking ‘another kick at the IP (intellectual property) can’. I’m going to start with patents and move on to copyright.

A June 26, 2012 news item from BBC News online highlights the costs associated with patent trolls,

The direct cost of actions taken by so-called “patent trolls” totalled $29bn (£18.5bn) in the US in 2011, according to a study by Boston University.

It analysed the effect of intellectual rights claims made by organisations that own and license patents without producing related goods of their own.

Such bodies say they help spur on innovation by ensuring inventors are compensated for their creations.

But the study’s authors said society lost more than it gained.

A June 27, 2012 commentary by Mike Masnick for Techdirt provides more detail,

The report then goes further to try to figure out whether the trolls are actually benefiting innovation and getting more money to inventors, as the trolls and their supporters like to claim. Unfortunately, the research shows quite a different story — with very little of the money actually flowing back to either inventors or actual innovation. In other words, we’re talking about a pretty massive economic dead-weight loss here. Money flowing from actual innovators and creators… to lawyers, basically. Innovators grow the economy. Lawyers do not.

Masnick’s commentary includes a table from the report showing how the costs have increased since 2005 (approximately $6B) to 2011 (approximately $29B).

The researchers are James E. Besson and Michael J. Meurer at Boston University and the open access report, The Direct Costs from NPE [non-practicing entities] Disputes, is available from the Social Science Research Network.

Interestingly the same day the study from Boston University was released was the same day that the US White House’s Intellectual Property Enforcement Coordinator, Victoria Espinel, announced she wanted comments about US IP enforcement efforts (from Espinel’s June 25, 2012 blog posting),

Today my office is starting the process of gathering input for the Administration’s new strategy for intellectual property enforcement. The overarching objective of the Strategy is to improve the effectiveness of the U.S. Government’s efforts to protect our intellectual property here and overseas. I want to make sure as many people as possible are aware that we are working on this so we can get the very best thoughts and recommendations possible. Part of the process of gathering public input is to publish a “Federal Register Notice” where we formally ask the public to give us their ideas. We will read all of your submissions – and we will make them publicly available so everyone can see them.

You can do so by following this link to Regulations.gov where you will find more details for submitting your strategy recommendations beginning today.

I believe that essential to the development of an effective enforcement strategy, is ensuring that any approaches that are considered to be particularly effective as well as any concerns with the present approach to intellectual property enforcement are understood by policymakers. [emphasis Mike Masnick of Techdirt] Recommendations may include, but need not be limited to: legislation, regulation, guidance, executive order, Presidential memoranda, or other executive action, including, but not limited to, changes to agency policies, practices or methods.

Beyond recommendations for government action as part of the next Strategy, we are looking for information on and recommendations for combating emerging or future threats to American innovation and economic competitiveness posed by violations of intellectual property rights. Additionally, it would be useful to the development of the Strategy to receive submissions from the public identifying threats to public health and safety posed by intellectual property infringement, [emphasis mine] in the U.S. and internationally as well as information relating to the costs to the U.S. economy resulting from infringement of intellectual property rights.

Aside: That bit about public health and safety being endangered by infringement is going to have to be explained to me. Moving along, Mike Masnick’s June 26, 2012 commentary about this matter on Techdirt includes an exhortation to participate,

I will be submitting my own thoughts, which I will also publish here, but for those thinking about what to say, I would focus on this sentence above [emphasized in the previous excerpt from the Espinel posting “I believe that essential …”]. Historically, many of the government’s approaches have not been at all effective, and have created a number of significant problems — most of which have been ignored by the government (either willfully or through ignorance). This really is a chance to provide examples of why the current policy is not effective (and will never be effective if it keeps on the current path) as well as the “concerns” with the current approach, such as the criminalization of expressive behavior and the outright censorship of media publications.

Meanwhile, we here in Canada are focused on copyright.

Michael Geist (the Canadian copyright guru) notes in his June 26, 2012 posting (Note: I have removed some links.),

Brian Brett, the former Chair of the Writers’ Union of Canada and an award winning author, has issued an explosive public letter that “breaks the ‘cone of silence’ that has obscured for too long some of the ugly practices of Access Copyright.”

You can get an idea why Geist described the letter as “explosive” from this excerpt (from the June 26, 2012 commentary in the Georgia Straight),

As a former Chair of the Writers’ Union of Canada (I’ve been a member more than thirty years), I have been asked to sign a letter to educational institutions supporting Access Copyright’s efforts to obtain collective licensing agreements with those institutions. I will not sign. I believe the time has come for action, not words. …

For the first time in history it has become too complex and expensive to quote the music of our era for many young writers. Writers are being charged exorbitantly for quoting other writers in their poems, fictions, and essays; yet are losing their own rights and income. Meanwhile, the Canadian Government has made legislation favouring educational institutions and media empires (at the expense of creators) in the name of supporting our nation’s culture.

As we earnestly discuss these issues, but do nothing to protect ourselves, we are seeing the rights of creators to fair compensation eroded to the point of where many are at risk of receiving nothing for their work.

Access Copyright, created specifically to collect fair compensation for creators, is central to this discussion. While I believe that educational institutions must pay writers, and will eventually pay them, it’s also necessary to call out the ugly regime of Access Copyright, which is collecting our copyright income. …

6. Access Copyright rewards textbook companies who demand that authors relinquish their copyright to their work by paying them both the publisher and creator copyright payment. Academic authors often consider textbook authorship crucial to tenure. Thus academic authors are open to being pressured by publishers out of their copyright. In effect Access Copyright is encouraging textbook publishers to undermine copyright by demanding a creators’ total copyright, and doubling the publisher’s payment for this ugly practice.

So, the academics who write those science and math (and other subject) texts are being pressured by financially motivated publishers to give up copyright while they are also being being pressured to publish for the well-being of their careers. Nicely done Access Copyright! (sarcasm)

While I suspect that I don’t agree with Betts on some issues, I do believe that content creators should receive some financial benefit from their work.

On a more hopeful note, the recent passage of Bill C-11 (Copyright) has some very good things indeed (from the June 21, 2012 commentary by Leigh Beadon on Techdirt [Note: I have removed a link.]),

Michael Geist has an excellent summary of C-11 with a comparison to previous phases of copyright law in Canada. The victories for smarter copyright law in C-11 sound almost like fantasy when compared to the American copyright debate. They include:

  • New fair dealing provisions (our version of fair use) to cover educational uses, plus parody and satire
  • New backup, format-shifting and time-shifting allowances that remove previous restrictions on networked DVRs and internet TV services (similar to those that have suffered in American courts)
  • Explicit copyright exceptions for “user-generated content”, aimed at protecting non-commercial fan-art and remixes
  • A bunch of explicit exceptions for schools, such as the right to stage public performances
  • A notice-and-notice system, not a notice-and-takedown system
  • A $5,000 cap on statutory damages for all non-commercial infringement

Sadly, there is the issue of the ‘digital lock’ provision which was rammed through Parliament despite almost universal condemnation from Canadians of all walks of life. Geist provides much more detail about this issue than I can. In fact, he offers two postings outlining both Canada’s Justice Dept. discussion about the digital lock provisions (June 25, 2012 posting) and the Competition Bureau’s (June 26, 2012 posting) and possible issues with constitutional rights.

On a much happier note for me personally is a recent Federal Court of Canada ruling about linking and posting, from the June 25, 2012 posting on the Michael Geist blog (Note: I have removed links.),

The Federal Court of Canada has issued an important decision involving copyright and posting content online. The case involves a lawsuit launched by Richard Warman and the National Post against Mark and Constance Fournier, who run the FreeDominion website. Warman and the National Post sued the site over the appearance of two articles and an inline link to photograph that appeared on the forum. The court dismissed all three claims.

While the first claim (Warman’s article) was dismissed on the basis that it took too long to file the lawsuit, the legal analysis on the National Post claim involving an article by Jonathan Kay assesses the copyright implications of posting several paragraphs from an article online. In this case, the article was 11 paragraphs long.  The reproduction on the Free Dominion site included the headline, three complete paragraphs and part of a fourth. The court ruled that this amount of copying did not constitute a “substantial part” of the work and therefore there was no infringement. The court added that in the alternative, the reproduction of the work was covered by fair dealing, concluding that a large and liberal interpretation of news reporting would include posts to the discussion forum.  The decision then includes an analysis of the six factor test and concludes that the use was fair.

So I can link to and quote from Canadian publications in peace, for now. (Great news!)

There is some additional analysis of the ruling in a (h/t) June 26, 2012 posting by Leigh Beadon on the Techdirt website.

No grand thoughts here. I just find this very fluid situation with regard to intellectual property important as I believe the outcomes will affect us all in many ways, including how we practice science.

2 thoughts on “Billions lost to patent trolls; US White House asks for comments on intellectual property (IP) enforcement; and more on IP

  1. Pingback: FrogHeart at the 2012 S.NET conference, part 4: academics talk about public engagement, DEMOCS card game, and China ‘breaks the rules’ « FrogHeart

  2. Pingback: The State of Science and Technology in Canada, 2012 report—examined (part 1: the executive summary) « FrogHeart

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