U.S. Chamber Of Commerce Releases Latest Bogus Study Pushing For More Draconian IP Enforcement

from the details-missing dept

Tue, Apr 27th 2010 12:08pm — Mike Masnick

The US Chamber of Commerce (which many people mistakenly think is a government organization -- it's not) has a long history of getting the facts wrong about intellectual property. The folks at the Chamber of Commerce have one basic mission, which is to protect the big businesses that fund it. And what better way to do that then to have the government help give them monopoly rights and then enforce those rights. The latest is that it has released a report which it falsely claims proves that stricter IP enforcement would boost the economy. But that's not what the report actually says. The Chamber of Commerce hired NPD Group to write this report, and you can read the results yourself (pdf). It's significantly weaker than even the most ridiculous studies we've seen in the past.

Basically, what the report does is talk about "IP-intensive industries," noting that they have created a lot of jobs. Then it picks twelve random "non-IP-intensive industries" and notes that they spend less on R&D and have lost jobs. That's it. But the conclusions it comes to are not supported by the facts. It takes several logical leaps as follows:

Because an industry is considered "IP-intensive" it is only successful because of intellectual property laws. That's simply not true. In fact, a study by CCIA showed that exceptions to intellectual property law contribute more to the economy in those industries than the IP law itself. The problem here is falsely assuming that any kind of "IP-intensive industry" is only possible or only successful because of intellectual property. And yet, the actual research suggests that the vast majority of that economic activity, while perhaps in "IP-intensive" industries has little, if anything, to do with intellectual property law or its enforcement.
Second, it assumes, but does nothing to support, the idea that stronger enforcement increases output in "IP-intensive" industries. In fact, actual research has shown the opposite to be true -- and that in cases where weaker enforcement occurs, output and economic activity increase.
It assumes that because the industries it picked contributed more jobs to the economy, that's because of intellectual property law. Yet, there's little evidence to support this basic claim. In fact, history has shown that increasing IP strictness often decreases jobs by limiting competition.
Finally, the report also assumes that IP-intensive industries are on the rise because of intellectual property law, not other massive shifts in the global market. Of course knowledge industries are growing in the US as agricultural and manufacturing jobs move elsewhere. But that's not because of intellectual property law. It's because of the natural progression of the economy. That the "non-IP intensive industries" it randomly chose to include (things like wood, textile, and paper) are on the decline is not due to intellectual property law at all. Claiming it does, as the report implies, is incredibly intellectually dishonest.

The report is a joke, based on a series of faulty assumptions. Tragically, the US Chamber of Commerce still gets attention, despite the fact that its claims pushing for stronger IP laws would do a lot more harm than good for most US business and innovation.

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Filed Under: chamber of commerce, draconian, intellectual property, studies

47 Comments

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Anonymous Coward, 27 Apr 2010 @ 12:28pm

i have to say once again you are stringing together unrelated studies, often that offer no empirical data, in order to dismiss another report that does the same. are you suggesting your own comments are a joke as well?
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- :Lobo Santo (profile), 27 Apr 2010 @ 12:38pm
  
  Re: Obvious troll is obvious
  Hello Coward! (welcome to the internet)
  
  The blue text is what's referred to as a link and it leads one to another website. Go ahead, give a try now.
  [ link to this | view in chronology ]
  - Anonymous Coward, 27 Apr 2010 @ 1:47pm
    
    Re: Re: Obvious troll is obvious
    Oh! I didn't realize that, thanks for pointing it out. I see how silly my comment must have seemed now.
    [ link to this | view in chronology ]
    - Anonymous Coward, 27 Apr 2010 @ 2:35pm
      
      Re: Re: Re: Obvious troll is obvious
      hi mike.
      [ link to this | view in chronology ]
      - Anonymous Coward, 27 Apr 2010 @ 2:51pm
        
        Re: Re: Re: Re: Obvious troll is obvious
        hi!
        [ link to this | view in chronology ]
  - Anonymous Coward, 27 Apr 2010 @ 2:35pm
    
    Re: Re: Obvious troll is obvious
    sorry lobo, i followed some of the links but in typical masnick standard practice much of it just links to more stories on techdirt, which in turn link to more stories on techdirt, which finally lead to a completely unrelated offsite article. the masnick spends too much time on self justification and self congratulations, typical guru material. the end is the same the numbers on both sides suck.
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    - Lawrence D'Oliveiro, 27 Apr 2010 @ 3:16pm
      
      Re: Obvious troll is obvious
      ... i followed some of the links but in typical masnick standard practice much of it just links to more stories on techdirt, which in turn link to more stories on techdirt ...
      
      Every one of those Techdirt stories has links to where you can find more information. Did you not notice they all have blue text as well?
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      - Anonymous Coward, 27 Apr 2010 @ 3:22pm
        
        Re: Re: Obvious troll is obvious
        and the blue text links to more techdirt stories which in turn link to more techdirt stories and so on. ratio is typically 3 to 1, 3 internal links 1 external link. its called bootstrapping, making it almost impossible to go back and show that the 'we already have shown' was just a link to some guys opinion piece or another one sided study.
        [ link to this | view in chronology ]
        
        Anonymous Coward, 27 Apr 2010 @ 3:39pm
        
        Re: Re: Re: Obvious troll is obvious
        Some of them do, some don't. But even the links to other techdirt stories have sources. As far as opinion, yes, some are the opinions of experts, some are studies conducted by academicians, etc... However, intellectual property apologists rely mostly on just opinion to support their views, vs abolitionists mostly rely on actual evidence.
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- Anonymous Coward, 27 Apr 2010 @ 1:32pm
  
  Re:
  I would like to know more. Could you please elaborate (I like your name BTW ;-) Are you part of the Coward clan as well?)
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- Big Al, 27 Apr 2010 @ 7:17pm
  
  Re:
  I confess I haven't read the studies, but I do know in my own field (software production) it has become a legal minefield over the past few years trying to dodge the 'patent traps'.
  In fact, it's coming to the point where, while we are an 'IP intensive industry', we are losing money just trying get something out of the door without being sued into oblivion.
  [ link to this | view in chronology ]
Reason2Bitch (profile), 27 Apr 2010 @ 1:23pm

Different interpretation
I don't think the grouping (IP-intensive and non-IP-intensive was arbitrary. That grouping is based on per employee R&D expenditure (pp 13).

With that definition in mind (i.e. IP-intensive = High R&D spending, and not placing too much emphasis on "Property" part of IP), I would agree with the author on all 7 numbered points he/she makes in the abstract. But the conclusion seems unsupported ("As such, protecting the intellectual
property derived from innovation is essential to the future of a wide range of American industries").
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Joel (profile), 27 Apr 2010 @ 1:47pm

Seriously...
While we are discussing this "Study" more and more studies are going to be released with useless information... U.S. Chamber of Commerce doesn't mean anything to me, we need to stop reading these stories we might get cancer of the brain with all the useless numbers and words in their findings.

All the companies just need to make their products a little bit more accesible.
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Anonymous Coward, 27 Apr 2010 @ 1:51pm

I gave a speech to the US Chamber of Commerce. It was mostly older white guys. Is this a surprise?
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Anonymous Coward, 27 Apr 2010 @ 1:58pm

The thing is that, of course monopolists hire more people than non monopolists. That's because monopolists are the only ones able to sell a product. But monopolies lead to less aggregate output and less aggregate output means that you have less jobs since you have less products being made. Competition leads to more aggregate output and hence more jobs because creating more products means that you must hire more people.

and of course if you have a monopoly on a product you are the only one who has any incentive to conduct R&D on it. That's not to say that patents cause more R&D overall. It just means that the patent holder has prevented others from conducting R&D on an idea/design and improving upon it. The net effect is less R&D since who can conduct R&D on something is no monopolized.
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- Anonymous Coward, 27 Apr 2010 @ 2:00pm
  
  Re:
  is now monopolized *
  
  but the point is that if the government grants you a monopoly on something, you are the only one allowed to sell it, so of course you will hire more people than the non existent competition since the competition has been banned.
  [ link to this | view in chronology ]
Anonymous Coward, 27 Apr 2010 @ 2:25pm

Ok, lets compare the IP intensive industries to the non ip intensive industries.

http://www.theglobalipcenter.com/sites/default/files/reports/documents/NDP_IP_Jobs_St udy_Hi_Res.pdf

"Food, beverage, tobacco"

Uhm... How is food a non IP intensive industry first of all. Monsanto owns most of the food supply thanks to patents. and beverages, like Cola and Pepsi, are certainly IP intensive Industries. Or is it that you simply label the industries you arbitrarily consider prosperous to be IP intensive and the ones you consider not to be prosperous to not be IP intensive. and what, you want new innovative ways of smoking a cigarette to get more people to smoke?

"Textiles, apparel, leather"

Ok, lets re - invent leather. Or maybe we can redefine it and call our new definition of leather an invention.

"Wood products"

Seriously? Sand products. Products made of dirt. Products made of ozone. Products made of rocks. Ok, so there isn't innovation there, big deal.

How should we innovate on wood? We have innovated on chairs, now we have electric chairs that massage you, but they're not made of wood. Innovation has ditched wood.

"Paper, printing, support activities"

I know for a fact that copiers are far faster than they were 10 years ago. Not only are they faster, they're far cheaper and they produce far clearer images color than they did 10 years ago. and scanners have improved a lot in the past 10 - 20 years. Stop making things up, there has been PLENTY of innovation in these areas. and don't tell me Konica Minolta, Xerox, etc... don't have patents, trust me, they do.

http://www.xeroxtechnology.com/ip1.nsf/sedan1?readform&unid=640EDE46D9F9E00085256D1E0065D 577

a Non IP industry indeed.

Also, part of the reason printing is going out of business is because paper is becoming obsolete. We all have computers now hence newspapers are dying.

"Plastics, rubber products"

Lets invent a new wheel made out of rubber. Lets call it the triangle wheel. INNOVATION!!!!

As far as plastics, this doesn't make much sense either. New, faster, phones with plastic components are always coming out. New computer monitors, etc... tons of new innovative products have plastic components. and so what if plastic itself becomes obsolete. What do you mean we should innovate on plastic?

"Nonmetallic mineral products"

Carbon? Ozone. Uhm.... oxygen? Chlorine? What do you mean non metallic. Most of the periodic table is metallic.

"Primary metals"

Like what? People create alloyed combinations by mixing metals because mixing metals produces emerging properties. but those primary metals are still used. What, you want us to find a new use for copper? Should I use copper to replace rubber? Make a tire out of copper? and many new and innovative products have primary metals inside them including computer components on faster computers.

"Fabricated metal products"

You want us to fabricate metal? Or you mean molding metal products. Metal is still used for new equipment.

"Machinery"

We have new machinery to build cars with. Heck, most cars now are practically built, to some extent, with computers and machines and to a much lesser extent by hand. That's innovation. What do you mean machinery. Be more specific.

"Electrical equipment, appliances"

There is that new light bulb out that supposedly saves a lot of electricity and allegedly lasts 5 years (though it never really does). Not sure what you mean by electrical equipment. If you mean like saws and whatnot the assembly lines for those have also been improved and automated moreso than the past.

"Electrical equipment, appliances"

This is a good one. Ok, I want to invent a table that barks. There we go.

"Misc non-medical equipment"

Can you be more vague, you're being too specific here.
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- Anonymous Coward, 27 Apr 2010 @ 2:33pm
  
  Re:
  The North American Industry Classification System (NAICS) is the standard used by Federal statistical agencies in classifying business establishments for the purpose of collecting, analyzing, and publishing statistical data related to the U.S. business economy.
  
  NAICS was developed under the auspices of the Office of Management and Budget (OMB), and adopted in 1997 to replace the Standard Industrial Classification (SIC) system. It was developed jointly by the U.S. Economic Classification Policy Committee (ECPC), Statistics Canada , and Mexico's Instituto Nacional de Estadistica y Geografia , to allow for a high level of comparability in business statistics among the North American countries.
  
  This official U.S. Government Web site provides the latest information on plans for NAICS revisions, as well as access to various NAICS reference files and tools.
  
  The official 2007 U.S. NAICS Manual, includes definitions for each industry, background information, tables showing changes between 2002 and 2007, and a comprehensive index. The official 2007 U.S. NAICS Manual is available in print and on CD_ROM from the National Technical Information Service (NTIS) at (800) 553-6847 or (703) 605-6000, or through the NTIS Web site. Previous versions of the NAICS Manual are available.
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  - Anonymous Coward, 27 Apr 2010 @ 3:03pm
    
    Re: Re:
    Thank you very much Mr. copy and paste.
    
    http://www.census.gov/eos/www/naics/
    
    Do you have anything meaningful to add?
    
    The point is that these people have defined old technologies and said that, "these technologies haven't improved" with little regard for changes in technology and the industry. It's like saying, "A wooden chair with four legs and a seat hasn't improved in 100 years." Well, yes, if you define a chair that way, it hasn't changed. But that neglects the fact that new innovations have been made that don't fall within such definitions. A new chair with the ability to adjust the height, but that may not fall within said definition. Etc... and even within their definitions, improvements have been made, it's jut that the chamber overlooks them.
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  - Anonymous Coward, 27 Apr 2010 @ 3:16pm
    
    Re: Re:
    "and adopted in 1997"
    
    "This official U.S. Government Web site provides the latest information on plans for NAICS revisions"
    
    Yes, revisions are needed. Imagine trying to define today's innovation exclusively using 1000 year old vocabulary. It's difficult trying to use these "standards" to define innovation because as new technology comes out new nomenclature also comes out.
    
    Imagine defining a wheel as, "a circular disk used for transportation" or something. Sure, wheels may not have really improved much, but that's not to say transportation technology hasn't. These definitions are irrelevant at best. Instead of saying, "the wheel hasn't improved" and defining technological improvement as the improvement of a very specific definition of a wheel (ie: a circular disk) a more relevant measure of improvement is transportation speed (ie: on average how much longer/shorter does it take you to get to point X and, on average, how many more people travel to point X compared to before. ie: it may take longer but that maybe due to population increases, not a lack of technological advancement). Communication technology (ie: on average, how much longer does it take to spread the news, on average how much cheaper and easier has it gotten to communicate with someone thousands of miles away). Not simply, "The telephone as a device that people dial phone numbers into and talk to others" (which has seen improvements with cell phones btw, but now no one dials a number a second time, only the first time and then they store them and get them from caller ID's. See, that's improvement. and sure, cell phones aren't made of wood, but what, you want us to make a cell phone out of wood just to show that wood has innovated?).
    [ link to this | view in chronology ]
    - Anonymous Coward, 27 Apr 2010 @ 3:19pm
      
      Re: Re: Re:
      Oh, and lets not forget that the horse and buggy industry hasn't improved either, the technology is mostly the same. but transportation certainly has.
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      - Anonymous Coward, 27 Apr 2010 @ 3:23pm
        
        Re: Re: Re: Re:
        the masnick has suggested he could save newspapers. i am sure he will suggest he can bring back the buggy soon too. gurus are like that.
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        Anonymous Coward, 27 Apr 2010 @ 3:28pm
        
        Re: Re: Re: Re: Re:
        Yes, take everything out of context. that will solve everything. You're an idiot TAM.
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        Anonymous Coward, 27 Apr 2010 @ 3:35pm
        
        Re: Re: Re: Re: Re:
        It's possible to put horses on synthetic steroids now. That's an improvement.
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        Anonymous Coward, 27 Apr 2010 @ 4:56pm
        
        Re: Re: Re: Re: Re:
        Oh, when will you learn?
        [ link to this | view in chronology ]
        
        Anonymous Coward, 27 Apr 2010 @ 7:53pm
        
        Re: Re: Re: Re: Re: Re:
        as soon as mikes underlings and mike himself remembers to sign on before making snide remarks.
        [ link to this | view in chronology ]
        
        Anonymous Coward, 27 Apr 2010 @ 8:24pm
        
        Re: Re: Re: Re: Re: Re: Re:
        Hi there TAM the hypocrite.
        [ link to this | view in chronology ]
        
        Anonymous Coward, 28 Apr 2010 @ 10:55am
        
        Re: Re: Re: Re: Re: Re: Re:
        ADORABLE!
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- Anonymous Coward, 27 Apr 2010 @ 6:23pm
  
  Re:
  At one time wheels were made of wood. Now we mostly use rubber. Does this mean patents are the cause of wood not being used to innovate new wheels? No, it just means that we've found better ways of doing things.
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  - abc gum, 27 Apr 2010 @ 6:33pm
    
    Re: Re:
    How was the wheel invented without the aid and protection of patents?
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    - Anonymous Coward, 27 Apr 2010 @ 7:02pm
      
      Re: Re: Re:
      Well, first they tried a triangle wheel. It didn't work so they improved it with a rectangular wheel. It still had issues so they refined it to a square wheel, that is, all sides are now equal. That still didn't work, so they improved it with a 5 sided wheel. Still didn't work. They kept on incrementally improving it until, finally, sometime in May of 2001, they got a circular wheel. It took millions of R&D dollars and many years of research and trial and error before they got it to work so a patent was in fact necessary.
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      - Niall (profile), 28 Apr 2010 @ 5:02am
        
        Re: Re: Re: Re:
        And prithee, how would a 'patent' have helped them with discovering these incremental improvements, or in finding the final product? The patent is simply to allow the 'final' discoverer to make money from it at the expense of everyone else. So they have a 20-sided wheel that rolls fairly well. Until someone invents a 100-sided wheel (or a round one) and gets sued silly for 'breaking' the patent.
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Jose_X, 27 Apr 2010 @ 9:13pm

Patents go where the action is. Where else are they going to go?

Do you want people to take out patents in an industry that is shrinking or in one where breakthroughs are being made?

Most(?) patents are not enforced for monopoly but rather are used to get royalties. If they were enforced for monopolies in large quantities, things would be very bad indeed. The golden geese would die. [ref. MAD] Instead, ideally, you want to keep the geese behind bars laying eggs as fast as possible but not so fast that you can't tax them all.

Patents are powerful and broad enough to be able to throttle innovation, slowing it down enough as necessary so as to increase the chances that you will be able to place a patent tax in front of revenues from innovation making its public debut in products. Again, you want products to come out fast, but not so fast that you fail to grab a patent that would tax it.

By definition, you can't use patents to skim money off an industry where little innovation is happening.

"You" is another name for the collective Patent Leeching.
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- Anonymous Coward, 27 Apr 2010 @ 9:36pm
  
  Re:
  "Most(?) patents are not enforced for monopoly but rather are used to get royalties."
  
  Most patents sit around and "collect dust" in that they never get implemented in products. Some of them even get implemented only after the patent has expired. Companies often file them for defensive purposes or to give them negotiation leverage. What a waste of resources.
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  - Jose_X, 27 Apr 2010 @ 10:27pm
    
    Re: Re:
    The intended meaning was: "most patents that get used"
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- Anonymous Coward, 27 Apr 2010 @ 9:48pm
  
  Re:
  "Patents go where the action is."
  
  Exactly, patents will naturally navigate to areas where the most innovation occurs simply because that's where the money is, not because patents somehow stimulate innovation. Innovation occurs in areas where innovation is most necessary and patent trolls simply want to monopolize such innovations.
  [ link to this | view in chronology ]
  - Anonymous Coward, 27 Apr 2010 @ 9:59pm
    
    Re: Re:
    and innovation occurs in areas with the highest potential for innovation as well, ie: we found laws of physics that we can innovate on. Patents will naturally navigate there, not because they stimulate innovation, but because innovation and the potential for innovation creates (or threatens to create) new markets and patent trolls want to monopolize these new markets. Shockley's field effect principle is one example of this.
    [ link to this | view in chronology ]
    - Anonymous Coward, 27 Apr 2010 @ 10:18pm
      
      Re: Re: Re:
      Another thing is that, if patents should go to anyone, they should go to those who discover new physical properties, not those who merely figure out ways to manipulate physical properties that others have discovered. Discovering new physical properties is more difficult than figuring out different ways of manipulating physical properties that others have discovered.
      
      It's like figuring out various software programs to write is easier than discovering for the first time the necessary physical properties that can be used to build a computer to begin with. Once you have a set of principles to work with it's easier to manipulate those principles. Discovering those chemical/physical principles to begin with is more difficult.
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      - Anonymous Coward, 27 Apr 2010 @ 10:20pm
        
        Re: Re: Re: Re:
        Or building software is easier once you have a compiler and programming language that someone else built that gives you a set of meaningful commands to use. Building that compiler and programming language from scratch is more difficult.
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    - Jose_X, 27 Apr 2010 @ 10:34pm
      
      Re: Re: Re:
      From a comment here: http://againstmonopoly.com/index.php?limit=10&chunk=0&perm=593056000000002211
      
      ****
      Fish' s book also goes into other strategies:
      
      (1) Choose The Market With Patentability In Mind
      
      A thorough goals/resources analysis invariably leads to a number of different markets that can be attacked. The question is, which ones should be chosen and which ones passed up. Here it is useful to map out potential growth of different markets with respect to the degree of patent protection available. In the chart below growth is mapped against patentability. The best markets are those that have both high growth and are open to patentable subject matter. High growth markets where there is little chance of securing broad patent protection will likely be inundated with competition. An example might be the wheelchair market.
      ****
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  - Ronald J Riley (profile), 30 Apr 2010 @ 7:08pm
    
    Cause & Effect
    "Patents go where the action is."
    
    Exactly, patents will naturally navigate to areas where the most innovation occurs simply because that's where the money is, not because patents somehow stimulate innovation. Innovation occurs in areas where innovation is most necessary and patent trolls simply want to monopolize such innovations."
    
    Patents do stimulate innovation in two ways.
    
    First, patents teach the invention which allows other inventors to build on the discovery.
    
    Second, patents offer a carrot to subsequent inventors to leapfrog a patent and an incentive to do so to avoid having to pay another.
    
    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 chronology ]
    - chillienet (profile), 3 May 2010 @ 9:54pm
      
      Re: Cause & Effect
      "First, patents teach the invention which allows other inventors to build on the discovery."
      
      First, patent lawsuits discourage other inventors from building on the discovery and punish those inventors that try.
      
      "Second, patents offer a carrot to subsequent inventors to leapfrog a patent and an incentive to do so to avoid having to pay another."
      
      Second, patents offer a carrot to lawyers to go hunting for any other invention that even remotely resemble said patent.
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DRiley, 28 Apr 2010 @ 2:29am

NDP not NPD Group
The Chamber didn't hire The NPD Group, the Chamber hired NDP Consulting. That's N-D-P.

Please correct this error immediately.
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Ronald J Riley (profile), 28 Apr 2010 @ 3:50am

Fuzy Reasoning
Most certainly the US Chamber is little more than a stooge for large corporate interests and they do not by any means represent the interests of other chambers and small business. But the same can be said of TechDIRT. I have corrected one of Mike Masnick's comments below. It is representative of just about everything Mike Masnick has to say about patent property rights. "Tragically, the (delete: US Chamber of Commerce) TechDIRT still gets attention, despite the fact that its claims pushing for (delete: stronger) weaker IP laws would do a lot more harm than good for most US business and innovation." 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, 28 Apr 2010 @ 10:55am
  
  Re: Fuzy Reasoning
  [citation needed]
  [ link to this | view in chronology ]
- vivaelamor (profile), 28 Apr 2010 @ 3:54pm
  
  Re: Fuzy Reasoning
  Perhaps you could furnish your anti-mike rhetoric with some actual arguments, please?
  [ link to this | view in chronology ]
- Anonymous Coward, 28 Apr 2010 @ 7:25pm
  
  Re: Fuzy Reasoning
  what the hell is fuzy reasoning?
  [ link to this | view in chronology ]