Economist Assumes That The Problem Is 'Thieves' Rather Than Bad Patent Laws

Patents

from the wow dept

Mon, Apr 12th 2010 4:37am — Mike Masnick

cryptozoologist points us to one of the most ridiculous analyses of the current patent situation by economist, and former Ross Perot running mate, Pat Choate, who doesn't seem to have a clue how innovation actually works, in claiming that patent infringement is usually "patent theft" by big companies. Independent invention? Overly broad patents? Patent thickets stifling innovation and research? Not even possible. It's all "theft."

America's largest big tech corporations are now using a business technique called "efficient infringement," which means that they calculate the benefits of stealing someone else's patented technology against the possibility of getting caught, tried in court and being forced to pay damages and penalties. If the benefits exceed the costs, they steal.

What makes patent theft so attractive is that infringement is not a criminal act and those found guilty face no jail time. Paying up is the worst that can happen to the infringer.

Of course, someone actually knowledgeable about patents would know the difference between infringement and theft. They would also know that it's quite rare for there to be a case of a company actually copying an idea from someone else. It's almost always independent invention -- and many of the lawsuits that he's so keen on later in the article are cases where an overly broad patent is brought up in a lawsuit about an innovation the original patent had nothing to do with.

This is a problem that happens all too often in these discussions. Folks who don't know much about how innovation really occurs in the tech world, and who falsely conflate concepts in tangible property with a completely different government-granted monopoly right -- automatically assume that infringement is the equivalent of "stealing." Are there cases where big companies "copy" an idea from a small company? Yes, absolutely. But it's a lot more rare than many make it out to be. The really innovative ideas? Those are the ones that big companies don't even realize are big ideas until it's too late.

A column like Choate's is dangerous in the amount of misinformation that it puts forth, backed up with the veneer of truth without any basis in fact.

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Filed Under: economist, patent

59 Comments

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Ed Woychowsky, 12 Apr 2010 @ 4:44am

Is it true?
Are ichthyosaurs suing cetaceans for infringement?
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Anonymous Coward, 12 Apr 2010 @ 5:13am

queue R.J. Riley...
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Michial Thompson, 12 Apr 2010 @ 5:21am

little mikee at it again
This is a problem that happens all too often in these discussions. Folks who don't know much about how innovation really occurs in the tech world, and who falsely conflate concepts in tangible property with a completely different government-granted monopoly right -- automatically assume that infringement is the equivalent of "stealing."

Isn't this EXACTLY the opposite of what you do to further your crybaby agenda?

You RARELY if EVER offer actual credible proof, just latch onto some idiot's blog post spitting out numbers that fit your agenda while the majority of the world sees things as they really are
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taoareyou (profile), 12 Apr 2010 @ 5:28am

Re: little mikee at it again
"spitting out numbers"

You mean like this:

"the majority of the world"

Nice sweeping, unsupported claim though. I needed some irony with my breakfast this morning.
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John Doe, 12 Apr 2010 @ 5:31am

Who would innovate if you checked patents first?
If you did a patent search before building your product, you would never build a product. There is almost no way to create a new product or website without infringing on many patents as almost anything that can be done has one or more patents. So it is best not to go looking for patents and just do it. Then hope to make enough money that you can pay off the patent holders when they show up.
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Richard (profile), 12 Apr 2010 @ 5:31am

Re: little mikee at it again
crybaby agenda?

When once a comment includes this kind of phrase then the one can deduce the attitude of the commenter is not receptive to rational argument. The rest of it is likely to be entirely predictable and of little value.

If you want to be taken seriously then it would be a good idea to refrain from name calling.
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DS, 12 Apr 2010 @ 5:39am

Re: little mikee at it again
I agree. Enough with the "Crybaby agenda".

People invent things.

Sometimes people invent things that are similar, without knowledge of either invention.

Possession of one idea does not instantaneously mean possession of any and all similar works, or works inspired by the original idea.

I'm with you. Enough with the crybabies.

Oh wait...
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Ima Fish (profile), 12 Apr 2010 @ 5:57am

The really sad part is, even if Pat Choate is absolutely correct, that companies are "stealing" patents after conducting a cost benefit analysis, he's still wrong.

There is absolutely nothing wrong with doing that. Companies make decisions based upon cost benefit analyses all the fricken time

This guy is a fricken retard. Even when we assume he's right, he's still wrong.
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Anonymous Coward, 12 Apr 2010 @ 6:07am

I'm actually kind of curious about how it is possible to steal a patent. Do you break into the US Patent Office and hack their computers to change the name on the form?
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Dementia (profile), 12 Apr 2010 @ 6:15am

Re: little mikee at it again
If Mike were really trying to forward his "crybaby agenda" you have to wonder why he would allow posts like yours from someone who is so obviously set against his viewpoint. The simple fact that he allows your posts to remain shows that he values a discussion that involves all the viewpoints, including the irrational ones such as yours.
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Anonymous Coward, 12 Apr 2010 @ 6:22am

Get off the infringement != theft bandwagon. Everybody knows what he means and there's no need to be overly pedantic. Cripes, he even calls it "efficient infringement".

BTW, he's right. Efficient infringement happens way too often.
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Anonymous Coward, 12 Apr 2010 @ 6:32am

Got to spend some to make some
Patent problems are not the result of "thieves" but they exist as a result of several decades of careful (non)-work by people who don't desire to work.

Today, they have a bank account to spend on politicians that they didn't have to work to accumulate.

As long as the politicians get the money, all is good, no?
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Hephaestus (profile), 12 Apr 2010 @ 6:33am

Re: Re: little mikee at it again
"Sometimes people invent things that are similar, without knowledge of either invention."

Calculus comes to mind ...
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Anonymous Coward, 12 Apr 2010 @ 6:34am

Got to spend some to make some
Patent problems are not the result of "thieves" but they exist as a result of several decades of careful (non)-work by people who don't desire to work.

Today, they have a bank account to spend on politicians that they didn't have to work to accumulate.

As long as the politicians get paid to write the laws, all is good, no?
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angry dude, 12 Apr 2010 @ 6:38am

bend over, little mikey
I'm gonna roll those anti-patent "studies" you usually cite into a nice fat paper roll and stick it where it belongs - in your a$$.....

Seriouly, dude

Every time I read this shitty blog of yours I want to puke
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Anonymous Coward, 12 Apr 2010 @ 6:41am

Fix it!!!
It's stuff like this that makes me want to vote for Ron Paul in 2012
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Lunkhead 101, 12 Apr 2010 @ 6:44am

The Lunkhead presents an idea
It's stuff like this that makes me want to vote for Ron Paul in 2012

If we called it a "Luke Pass" instead of a "Tebow Pass" would that work?

.
.
.

.
.
Too soon?
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Ima Fish (profile), 12 Apr 2010 @ 7:01am

Re:
"Get off the infringement != theft bandwagon"

It's not merely pedantic to point out that infringement is completely different from theft. It's absolutely correct. Even our highest court agrees that infringement is not theft. Dowling V. United States, 473 U.S. 207 (1985) Heck, why not call infringement "rape" or "murder", it makes about as much sense. To constantly refer to infringement as being even remotely synonymous with theft is simply retarded.

"Efficient infringement happens way too often."

How often is "too often"? What criteria are you using to set your high and low tolerances? Why is a cost/benefit analysis a bad method for determining a business course of action? Would you prefer taro cards? An Ouija board?
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Anonymous Coward, 12 Apr 2010 @ 7:09am

Re: bend over, little mikey
Why does techdirt put up with such obvious trolls? :/
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Steven (profile), 12 Apr 2010 @ 7:10am

Re:
"BTW, he's right. Efficient infringement happens way too often."

So... how often does it happen? By your assertion that it happens way too often I would hope you would have some idea how often it happens, and have some threshold of what is too often. However, I doubt this is the case.

Does it happen? probably, but I would challenge anybody to show a single case where an idea was copied from a patent. Just one. I strongly doubt it exists as patents are written to be as broad and worthless (from a disclosure perspective) as possible.
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MadJo (profile), 12 Apr 2010 @ 7:27am

Re: Re: bend over, little mikey
That's the downside of freedom of speech. Quick someone call a congressman to write a law against the freedom of speech. ;)
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Dark Helmet (profile), 12 Apr 2010 @ 7:30am

Re: Re: Re: bend over, little mikey
Sorry, Angry Dude has a patent pending on Freedom of Speech....

On the other hand, why in the world would someone want to insinuate that they are going to analy rape another individual? That seems like the kind of person we probably ought not pay all that much attention too....
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nasch (profile), 12 Apr 2010 @ 7:47am

Re: Re:
The problem is when companies make a cost/benefit analysis about whether to break the law. If they believe it's a bad law, and they are up front about breaking it, no problem. Corporate civil disobedience. However, they will always lie and say they believe they are not breaking any laws. That I have a problem with.

With that said, I would guess that is a minority case in patent infringement, but in general I'm certain companies make decisions about whether to break the law and hide it every day, if not every minute or every second. That doesn't mean it's OK though.
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Anonymous Coward, 12 Apr 2010 @ 7:47am

Re: Re:
You're right - in court you have to be precise with your language. In a public forum, not so much. Generally, everybody knows that people who pirate moves aren't eye-patch wearing parrot lovers. Identity thieves aren't leaving people without an identity.

It's counter productive and boring (IMHO) to argue language. In a public forum, words like theft are defined by their usage. At one point it would have been ridiculous to conflate infringement and theft. That's changing and fighting that change is tilting at windmills (c.f. "beg the question").
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Dark Helmet (profile), 12 Apr 2010 @ 7:53am

Re: Re: Re:
"It's counter productive and boring (IMHO) to argue language."

I disagree. We don't just speak in language, we THINK in language as well. One of the wonderful things about language is that there is usually a very defined right and wrong when it comes to definitions and usage. The color and implications of certain words affect us not only consciously but subconciously as well. That's one of the reasons you hear key phrases repeated over and over again in talking points, particularly on the political stage.

In the strictest definition of the word, Obama Healthcare doesn't equate to socialism. But you get a bunch of people repeating that heavily loaded word over and over again, and half the population begins repeating it for them. Next thing you know, you've got people running around saying that it's socialism, when those people have NO idea what they're talking about. They just heard someone else say it, and they're repeating it.

If you think that isn't EXACTLY what is going on with words like "theft", "piracy", etc., I think you've got your head in the sand....
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Anonymous Coward, 12 Apr 2010 @ 7:55am

Re: Re: Re:
Just because a bunch of idiots say orange and blue are the same color does not mean I have to accept it. Even if a whole bunch of idiots make that assertion, that does not make it so. Hell, if the general (manufactured) opinion is that orange and blue are the same, I still don't have to accept it.

Anyways, all you pedants should shut the hell up! I say the sky is orange! It's the same thing as blue, so who cares?!
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Thomas (profile), 12 Apr 2010 @ 7:57am

Re: bend over, little mikey
"Every time I read this shitty blog of yours I want to puke"

That's the cognitive dissonance causing disorientation. Either that or you suffer from intellectual bulimia. Either way, get help.
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Anonymous Coward, 12 Apr 2010 @ 8:19am

Re: Re: Re: Re:
What are you arguing for? Common English to be static and strictly defined?

The orange == blue example is absurd. A much more apt example would be violet == purple. To many, they are similar and you would be forgiven for saying a violet fabric is purple. To a designer or visual artist, they could be very different and confusing the two would be idiotic.

When it comes to infringement and theft, I guess you are in the lawyer camp and I'm in the layperson camp.
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Anonymous Coward, 12 Apr 2010 @ 8:28am

So much effort goes into expressing righteous indignation over one's use of the word "theft" in its colloquial sense that the actions of the "thief" are largely unexamined.

Query: When was the last time a bank, any bank for that matter, extolled in its annual report the amount of its monies on hand devoted to the conduct of R&D to design and develop new methods and machines to facilitate and improve the scanning of checks? I have seen many banks over the years use trademark law for their benefit. Not once, however, have I seen such an institution wax poetic about a new invention created by its R&D Department. I wonder why?
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Anonymous Coward, 12 Apr 2010 @ 8:29am

Re: Re: Re: Re:
I just get frustrated when I see an interesting article and the discussion gets hung up on verbage. I would like to see more discussion of the actual underlying ideas and less discussion of nomenclature.

When the author conflated theft and infringement, he didn't really confuse anybody. Yeah, you might not like his choice of words, but put that aside. I'd love some rational discussion around the meaning of the article rather than the article's composition.
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Pixelation, 12 Apr 2010 @ 8:36am

Piracy
Next they will be calling it patent "piracy".
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Anonymous Coward, 12 Apr 2010 @ 8:36am

patents = justification for price gouging
so some 3rd world country makes a pair of identical levis jeans and sells them for 10$ at a profit and levis gets up set and so do the rest of you.

YA know some counterfeiting would actually benefit mankind
which leads to wonder why we penalize some aspects of it.
genaric drugs should wait maybe 3-4 years and no more to allow massive research recouped , while i dont always agree with that its at least palpable to many. THE cheap jeans being identical are a savings for mankind from the get go big time. THE ONLY TIME it should be flogged to death and stopped is if the quality is less. but how would you legislate somehting intelligent?
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Dark Helmet (profile), 12 Apr 2010 @ 8:43am

Re: Re: Re: Re: Re:
"Yeah, you might not like his choice of words, but put that aside. I'd love some rational discussion around the meaning of the article rather than the article's composition."

Fair enough, but when you consider the broader consequences of the word choice, as well as the possible motive for those choices, I think that has everything to do with the rest of the article. Why do you think we have such a problem with the word choice? It's because to us, it's clear what is being attempted.

Most of us know what he means, I think. But he's still wrong. And there are probably enough infrequent visitors here that I'd hate for them to have one more misguided soldier running around talking about theft this and piracy that, a la political issues....

I dunno, maybe I'm more inclined to weight the value of words heavily because I'm a writer. I just know how this whole repitition of loaded words thing works these days, and it pisses me off. Why can't he just use the proper word? I don't get it....
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Anonymous Coward, 12 Apr 2010 @ 8:47am

Re: Piracy
Didn't we already have a troll on techdirt that called it patent piracy?
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Anonymous Coward, 12 Apr 2010 @ 8:51am

Re: Re: Re: Re:
"Next thing you know, you've got people running around saying that it's socialism"

Yep. The meaning of "socialism" is changing. It's interesting, somewhat disturbing, but ultimately not surprising to me. That said, it doesn't change the costs or benefits of Obama Healthcare. When people complain that it's socialist, I understand what they are saying.

Judging from the title Mike gave this article, I don't think the point was that somebody writing informally used the word "theft" when he really should have used "infringe". It was that an economist is arguing that the punishment for infringement doesn't fit the crime. I think you and I arguing over word choice is off topic.
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Dark Helmet (profile), 12 Apr 2010 @ 9:02am

Re: Re: Re: Re: Re:
Fair enough.

/word choice discussion
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Anonymous Coward, 12 Apr 2010 @ 10:05am

Re: little mikee at it again
Isn't this EXACTLY the opposite of what you do to further your crybaby agenda?
And intelligent discussions always begin with one side calling the other a crybaby. /endsarcasm
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Simon, 12 Apr 2010 @ 10:42am

Re: Re: Re: Re:
You can argue until you're orange in the face - it doesn't change anything.
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Michael Lockyear, 12 Apr 2010 @ 10:57am

Re: Re: bend over, little mikey
I suspect because they generate comments!
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Ronald J Riley (profile), 12 Apr 2010 @ 11:08am

It is Patent Piracy and the Piracy Coalition / Re: Piracy
Actually there are two Piracy Coalitions,

1) The worst is the Coalition for Patent Piracy & Fairness

2) The other, marginally less disreputable is the Coalition for 21st Century Patent Deform & HARMonization.

Both are trying to socialize inventor work for their own profit. The first group has Mike Masnick's mindset, and wants to destroy the patent system outright. The second group wants to turn the system into a kings sport while preserving the value of their own patents.

Ronald J. Riley,

Speaking only on my own behalf.
President - www.PIAUSA.org - RJR at PIAUSA.org
Executive Director - www.InventorEd.org - RJR at InvEd.org
Senior Fellow - www.PatentPolicy.org
President - Alliance for American Innovation
Caretaker of Intellectual Property Creators on behalf of deceased founder Paul Heckel
Washington, DC
Direct (810) 597-0194 - (202) 318-1595 - 9 am to 8 pm EST.
[ link to this | view in thread ]
Anonymous Coward, 12 Apr 2010 @ 11:21am

Re: It is Patent Piracy and the Piracy Coalition / Re: Piracy
Yeah, we should instead trust the shill organizations listed in RJR's laughable signature that have information half a decade old and designs made in MS Paint.
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nasch (profile), 12 Apr 2010 @ 12:55pm

Re: Re: Re: Re: Re:
I think orange and blue is a better analogy actually. Orange and blue are quite different, while purple and violet are not the same but very, very similar. Meanwhile, there are deep and important differences between theft and patent infringement. In fact they actually have very little in common.

Where the analogy differs is that orange and blue are not only different, but *obviously* different (which is the whole point of an analogy). Theft and infringement, if you just use the words without thinking about them much, might seem to be the same. If you compare them to violet and purple, you're implying that the two are very similar and it's possibly OK to use the terms interchangeably. I guess maybe you think that is the case, and that is why you chose that analogy and rejected the orange/blue one.

However, others of us will continue to point out when words are used incorrectly, because it's impossible to have a reasonable discussion about something unless we understand the words we're using.
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nasch (profile), 12 Apr 2010 @ 12:56pm

Re: Re: Piracy
Nice call!
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Anonymous Coward, 12 Apr 2010 @ 1:31pm

Re: Re: Re: Re: Re:
When the author conflated theft and infringement, he didn't really confuse anybody.

To the contrary, I've seen many people claim things like "copyright infringement is exactly the same as going into a store and stealing things". It isn't, and people who claim that it is are being dishonest.

Yeah, you might not like his choice of words, but put that aside.

Words are important: they determine whether or not you're speaking the truth. I, for one, am not willing to put the truth aside, although I'm sure many in the copyright industry would like for us to do so.
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Anonymous Coward, 12 Apr 2010 @ 1:38pm

Baby Rape
Yep. The meaning of "socialism" is changing.

The meaning of "baby rape" is changing too. The way I see it, an author's creative works are his/her "babies". When someone infringes the copyright on those works, they are violating those works in the worse way. Thus, copyright infringement equals baby rape, pure and simple, and copyright infringers are "baby rapers".

I think you and I arguing over word choice is off topic.

And if of you baby rapers around here disagree with me, you're off topic so STFU!
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Anonymous Coward, 12 Apr 2010 @ 1:41pm

Re: Baby Rape
Applies to patents too.
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Anonymous Coward, 12 Apr 2010 @ 2:05pm

Re: Re: Re: Re: Re: Re:
In a way, you're making the exact same point I was trying to make. To a small subset of the population and in certain venues, it's very important to distinguish theft/purple and infringement/violet. To everybody else, it's not an interesting distinction. You wish it would be orange/blue to the rest of the world, but it simply isn't.

If I warn my kids about the risks of stealing music online, they know exactly what I'm talking about.

It is only possible to have a reasonable discussion with those who are reasonable. Too many people in this forum get tied up in analyzing how something is said rather than what is said. It's counter productive and a sad waste of the combined insight of all the readers who visit this blog.
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Anonymous Coward, 12 Apr 2010 @ 2:17pm

Re: Re: Re: Re: Re: Re: Re:
If I warn my kids about the risks of stealing music online, they know exactly what I'm talking about.

What? It's the same thing as baby rape! Your kids didn't already know that raping babies was wrong? Just what kind of kids do you have, anyway?
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dorp, 12 Apr 2010 @ 2:23pm

Re: Re: Re: Re: Re: Re: Re:
If I warn my kids about the risks of stealing music online, they know exactly what I'm talking about.

They know what action you do not want them to perform (go online, download, etc.) it does not mean that they understand what is actually right/wrong. This looseness with language is what leads to another generation of morons that cannot even figure out what IP stands for. So, thank you for brining up your kids to be fearful of something they do not understand just because you were too lazy to use proper words to describe concepts.
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Anonymous Coward, 12 Apr 2010 @ 5:45pm

Re: Re: Re: Re: Re: Re: Re:
If I warn my kids about the risks of stealing music online, they know exactly what I'm talking about.

Where I live there is no risk to "stealing" music online. I mean, legally speaking. They don't even call it stealing.
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Anonymous Coward, 12 Apr 2010 @ 6:02pm

Re: Baby Rape
The meaning of baby rape is not changing. Dark Helmet pointed out a specific way that the word "socialist" is being used now. It's easy to find examples in the recent news that back Helmet's assertion.

You're just being hyperbolic.
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Darryl, 12 Apr 2010 @ 6:25pm

Infringement Vs Theft
Infingement is a breaking of a law or a rule, that infringement might be breaking the speed limit, or theft or murder. If you kill someone you both infringe the law against murder, and commit the act of murder.

If you use someone elses idea, or inventions, or patents, you infringe the patent laws, and steal the invention.

So the infringement you make in the breaking of the patent by commiting THEFT. Got it ??

_____________-

"by John Doe
If you did a patent search before building your product, you would never build a product. There is almost no way to create a new product or website without infringing on many patents as almost anything that can be done has one or more patents."

Ah yes, the good old argument of "we are too stupid to come up with our own idea's, and too stupid to do patent searches, we cant innovate and therefore we just take what we can for our own use".

After all it's easier than actually coming up with something better.

And as usual, im still waiting for the list of examples where software patents or patents in general have even stiffled innovation. As yet examples to support you're claim seems as rare as FOSS innovation !!
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Anonymous Coward, 12 Apr 2010 @ 6:43pm

Re: little mikee at it again
Michial Thompson ... keepin it classy, as usual.
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Anonymous Coward, 12 Apr 2010 @ 6:47pm

Re: It is Patent Piracy and the Piracy Coalition / Re: Piracy
"Both are trying to socialize inventor work for their own profit. "

This makes no sense - you do realize that - right?
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Anonymous Coward, 12 Apr 2010 @ 6:55pm

Re: Re: Baby Rape
The meaning of baby rape is not changing.

Sure it is. I see an example right up above.

Dark Helmet pointed out a specific way that the word "socialist" is being used now.

And the AC above pointed out a specific way that the term "baby rape" is being used now.

It's easy to find examples in the recent news that back Helmet's assertion.

It's easy to find a recent example for "baby rape" right up above.

You're just being hyperbolic.

Kind of like those calling patent infringement "theft", eh? Well join the club!
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Anonymous Coward, 12 Apr 2010 @ 7:02pm

Re: Infringement Vs Theft
If you use someone elses idea, or inventions, or patents, you infringe the patent laws, and steal the invention.

The only one coming close to taking an idea away form anyone is the patent holder. So if someone's committing theft, it's the patent holder.

So the infringement you make in the breaking of the patent by commiting THEFT. Got it ??

And that's a LIE. Got it?

And why is that copyright and patent supporters so often seem to be such big liars, anyway? I guess it must just be the type.
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Ronald J Riley (profile), 13 Apr 2010 @ 3:08am

Mike Masnick's Incredible Arrogance
"Of course, someone actually knowledgeable about patents would know the difference between infringement and theft."

I know for a fact that Pat Choate is very knowledgeable about patents. It is Mike Masnick who is not.

Patents can have very significant economic value. Misappropriating patents is no different than any other fraud which diverts income from the rightful owner to some crooked shyster.

Look at the scope of patent thievery, billions of dollars are being stolen and that theft greatly limits the ability of inventors to create jobs and prosperity for America.

Ronald J. Riley,

Speaking only on my own behalf.
President - www.PIAUSA.org - RJR at PIAUSA.org
Executive Director - www.InventorEd.org - RJR at InvEd.org
Senior Fellow - www.PatentPolicy.org
President - Alliance for American Innovation
Caretaker of Intellectual Property Creators on behalf of deceased founder Paul Heckel
Washington, DC
Direct (810) 597-0194 - (202) 318-1595 - 9 am to 8 pm EST.
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Anonymous Coward, 14 Apr 2010 @ 4:14pm

Re: Mike Masnick's Incredible Arrogance
I know for a fact that Pat Choate is very knowledgeable about patents. It is Mike Masnick who is not.

I know for a fact that Ronald J Riley is a blow hard. I even have evidence. See post above.
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Daphi (profile), 16 May 2010 @ 1:44pm

opinions vs. real life
take a look at this very recent news report about "efficient infringement" here. Banks went to the extreme; as will most big companies, to protect their ability to take from small business.

http://www.washingtonpost.com/wp-dyn/content/article/2008/02/13/AR2008021303731.html?nav=emailpa ge

Big companies don't create a lot of jobs or a lot of innovation. They do ply their big check books to warp the laws however.

And Anonymous Coward, perhaps you should try to suck it up enough to post your real name if you are going to blast Mr. Riley, who does post with his name and creds.
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