With the rise of the DVR and the death of the captive audience, it's no surprise that product placement has become more and more popular. But would you believe that ad agencies are trying to patent forms of product placement? Apparently, big ad firm WPP is being sued by a company for violating its patent in an ad campaign run for Microsoft's Bing search engine. The patent in question (6,859,936) is for "a method and system for producing program-integrated commercials." Basically, the idea is to use the actors and sets from a TV show to film a regular commercial spot, and then run that during the show itself. Yes, someone got a patent on that. Why? Who the hell knows. This is a perfect example, by the way, of how just because something's "new" it doesn't mean it's not obvious. It's just that it's so obvious most people wouldn't even bother thinking about patenting it.
Just last week, plenty of tech publications were up in arms over the news that Microsoft had apparently secured a patent on XML word processing documents (patent 7,571,169). Of course, when you live by software patents, expect to die by software patents... as a judge (in East Texas of course) has now issued an injunction against Microsoft, barring the sale of Microsoft Word because it infringes on a patent that involves (you guessed it) XML word processing documents.
The judgment against Microsoft in this case actually isn't new. We wrote about it and the $200 million judgment back in May, noting how insane it was that the company holding the patent, i4i, felt that it deserved $98 for every copy of Microsoft Word ever sold. For what? Its patent, 5,787,449, is about XML editing of a word processed document. How that could be worth $98 per copy of Word is beyond me. Actually, how it's patentable at all is beyond me... but that's another story.
Of course, there's about 0% probability that this will actually stop the sales of Word, but it's ridiculous for Judge Leonard Davis to issue this injunction in the first place. As he well knows, the Supreme Court ruled in the MercExchange case that injunctions often don't make sense in patent infringement cases. In that case, the Supreme Court says that a judge should weigh a variety of factors in determining if an injunction is reasonable. From the actual injunction, there's no evidence at all that the judge weighed anything at all. However, he gave Microsoft 60 days to comply, which is ample time for Microsoft to appeal the injunction, and in such cases it's quite common for the appeals court to stay the injunction.
But, honestly, the whole thing shows (yet again) how screwed up the patent system has become. The fact that a judge would ban all sales of Microsoft Word because it can edit an XML document? And that's on top of a $200 million award for infringing on this patent? How can anyone think that's a sane outcome?
I have to admit, I wasn't going to write anything at all about the Yahoo/Microsoft search deal. It honestly seemed pretty pointless -- much bluster about nothing at all of importance. After talking it over with an editor at Forbes, however, I agreed to write up an op-ed for them about why the deal is misguided, and I wanted to expand on one part of that here. I just don't think there's very much interesting in fighting the last battle over "search" rather than looking at where things are headed. And, on that front, I noted:
People are discovering that information finds them, rather than them going in search of information. Search already works. The next interesting challenge is in improving the way information finds you, rather than the way you find information.
That is the key point that innovators in the internet space are starting to figure out. Information is much more powerful when it finds you (for example, when it's passed along by someone you trust). But that information doesn't just find you by itself. The internet helps, in making it easy to pass along a link or some text -- or to share/embed/etc. some content. But the tools for sharing information need to improve drastically, and that's where the next excitement will come from. It's in enabling relevant information to find you rather than the other way around. And, Yahoo/Microsoft has nothing to do with that at all.
Separately, this is also why I think sites that are trying to lock up content behind paywalls or limited access are making things worse. They're doing the opposite of where the internet is moving. They're making it harder for their information to find you, and they'll discover that this will lock them out of much of the opportunity.
We've argued before that the antitrust lawsuit against Microsoft was misguided (though, I'll admit that I was in the camp that thought it made sense at the time, before realizing that was a mistake). The fact that the EU continues to go after Microsoft on antitrust issues seems even more silly. Farhad Manjoo has an article in Slate, officially about why it doesn't make sense to go after Google on antitrust charges, but with most of it detailing why Microsoft wasn't really an antitrust problem:
Many of Microsoft's assets turned out not to matter, because upstarts like Google and old foes like Apple found ways to innovate around them.
Indeed, in many ways Microsoft's size was a liability, not an asset. This is the classic innovator's dilemma; the company was so intent on protecting its cash cows--it derives most of its revenue from two products, Windows and Office--that it was blind to opportunities in new markets. Microsoft couldn't make a Web e-mail system like Gmail, because that would have threatened Outlook. And why should Microsoft bother with free online word processing apps when Office was doing so well? When journalist Steven Levy showed Bill Gates the first iPod, Gates' first reaction was, "It's only for Macintosh?" Gates saw the iPod through the lens of desktop computers; if the iPod connected only to Macs, it didn't pose a threat to Microsoft. What he didn't figure out was that the iPod would herald the iTunes Store, allowing Apple to become not only the most influential entertainment company in the world, but also the dominant software maker for mobile devices. Yes, the first iPod didn't work on Windows. In time, it would help render Windows irrelevant.
Indeed. This is a point that we've raised often before. Underdogs beat out big companies all the time, by changing the rules completely. When we talk patents, we hear people insisting that small inventors can't succeed because big companies will just "steal" their idea, but the simple fact is: if that big company recognizes the value in your idea, then you probably weren't going to succeed in the first place. The real innovators get responses like Gates' above to the iPhone. They come from so far out of left-field that the "big companies" don't see them coming (at all), even when they're right beneath their noses.
I've been pointing out why an open platform beats a closed platform over the long haul with regards to the iPhone, and linking to various stories concerning the arbitrary nature of being allowed (or not) on the iPhone. But, Harry McCracken, over at Technologizer, does a great job illustrating the point by playing the "what if" game, and thinking about how Windows would have developed had Microsoft similarly controlled every app. It doesn't take long to realize how much slower innovation would likely have been on the PC platform (though, it might have opened up more of an opportunity for other platforms):
Would Microsoft have distributed Microsoft Office rivals such as SmartSuite or WordPerfect Office via its app store?
Well, maybe, in theory at least-after all, it doesn't sell Microsoft Office as part of Windows, so it couldn't use the "it duplicates functionality that's already in the product" excuse. Call me a cynic, though, but I suspect that competitive office suites would have run into trouble if Microsoft had controlled all Windows software distribution. And hey, didn't WordPerfect duplicate features in Notepad?
How about Netscape Navigator?
When Netscape first appeared in 1994, the current version of Windows (3.11) didn't have a browser. Even Windows 95 didn't have one at first--Internet Explorer was part of the extra-cost Plus Pack. Then again, Windows 95 did ship with the dreadful client for the original version of MSN, a proprietary online service which definitely did compete with the Web. That might have been reason enough for Microsoft to nix Navigator for duplicating Windows functionality. And once IE was part of Windows, Microsoft could have given Navigator the boot retroactively.
Safari? Firefox? Chrome?
They all appeared long after Windows got a browser as standard equipment. No, no, and no.
And it goes on from there. Fun thought experiment if you're one of the believers that Apple's closed iPhone system is somehow "good" for innovation.
A bunch of folks keep submitting various versions of this story about how Microsoft has apparently received a patent on join-leave in split-screen multiplayer games. We see so many of these sorts of stories these days, it's getting a bit tiresome to talk about them, but no less disappointing. As Matt Peckham says in the article linked here:
In any case, the idea that methodologies like these get tied up in patent law is unsettling. Games, like books, television shows, movies, works of visual art, etc. thrive off of (and to a considerable extent, are inexorably bound up in) a certain amount of healthy imitation. Dynamic split-screen "multi-play" in video games is a process independent of a patentable mechanism like the Wii-remote. Clapping a patent on it isn't so radically far off from claiming
typing
like
THIS
or
sOmEtHiNg
...is a "process" or "procedure" or "methodology" someone ought to have "sole right to make, use, or sell."
Patent law is depressing. It's a somewhat perverse way to stockpile vaguely defined, often semantically specious technological speculation and, whatever its claims about competitively encouraging creativity, often has the contrary effect of throttling it.
If so many people in and around the industry realize how silly and stifling these sorts of patents are, why do they still exist? Why do millions get wasted every year stockpiling more of these patents? Why do we, as a society, allow it?
And... here we go again. A company named Tsera LLC, a Texas company that has no products or online presence, and which certainly appears to be a typical patent hoarding shell company has now sued a bunch of companies in East Texas (of course) for patent infringement. Of particular interest are the claims against Apple and Microsoft. The patent in question, 6,639,584 is for some sort of touch interface, and the lawsuit claims that the iPod and the Zune both use touchpads that infringe on the claims in the patent. Of course, the patent itself seems to cover some slightly different things, as the article notes the system doesn't have visual feedback and users don't need to view the device. That's not quite the way portable music devices work... Once again, this appears to be a blatant money grab by some folks who had nothing to do with the actual advancement in this space.
Want to know just how incredibly confusing and impossible copyright law has become? Just take a look at this lawsuit, filed yesterday by some music publishing companies against Microsoft, Yahoo and Real Networks, claiming that the online music stores each of them runs (the Zune store, Yahoo Music and Rhapsody) infringe their copyrights (thanks Eric Goldman for sending this over). How can that be, you ask? Surely these companies properly licensed the music they offer in their streaming/download offerings, right? Well, the lawsuit doesn't provide that much in the way of detail (and I've spoken to a few copyright lawyers -- none of whom seem to agree with each other!), it sure looks like the claim is that Microsoft, Yahoo and Real may have licensed the copyrights on the recordings, but did not license the copyright on the compositions. It sounds like (though, again, the details are fuzzy) that the record labels did licensing deals with these music services, but publishers and labels are separate entities (even if the labels own many publishers), and the rights are separate.
It's pure speculation until more details come out, but one imagines that the licensing deals with the record labels included some sort of assurances that the publishing rights were covered as well -- and for songs whose publishing rights were covered by the major record labels, that's probably the case. But for songs where the publishing rights were owned by independent companies -- such as MCS Music America, the claim appears to be that the publishing rights were never cleared -- and thus, Microsoft, Yahoo and Real were streaming/downloading music to which they only held some of the rights. Yikes.
Most of the complaint details which songs were offered without (allegedly) having secured all the rights. And, of course, the publishers are claiming that every time a song was streamed or downloaded, it counts as a separate act of infringement. If the court agrees, this could represent a massive liability for Microsoft, Yahoo and Real, given the fines we all know can be issued over a single instance of infringement.
That said, this is yet another example of the convoluted house of cards that copyright has become. The idea that you can license a recording, but then need to get a separate license from a totally different party for the rights to the "underlying composition" (and don't get us started on the need to make sure you're covered for reproduction, distribution and performance rights -- three separate issues under copyright law), and you begin to get a sense of the problem. Basically, every time some new technology or innovation comes along, the copyright holders run to Congress to slap on another right, rather than actually innovating on the business model side. And on top of it, when new technologies like the internet come along, it's not at all clear which rights really apply and who controls/owns what rights. Suddenly, you have a massive mess for a company trying to do something as simple as let people listen to music. Just for that, you get a massive lawsuit like the following:
It's the sort of system only a greedy copyright lawyer could love: it's designed not to incentivize creation (copyright's stated purpose) or to facilitate the distribution of content -- but instead designed for the exact opposite: to confuse and hinder (but to keep copyright lawyers quite busy and gainfully employed).
There's a disturbing trend in various discussions we have here (especially on patent discussions) where people seem to insist that big companies automatically win in competitive environments. Yet, especially in the tech space, we've seen that it's often quite difficult for big companies to do that. Smaller companies are often more innovative and effective at taking on big companies. The idea that some big company can just copy someone else's product and automatically take over the market is clearly wrong. Does it happen sometimes? Sure. But as has been noted by many folks, if your product is truly innovative, you'll often have to beg people for attention, rather than worrying about anyone copying it.
A great example of this is the failure of Microsoft Money. The company has now announced that it's going to discontinue the product despite years of effort and millions of dollars spent to try to defeat Intuit's Quicken product. In fact, the saga of the battle between Intuit and Microsoft highlights (yet again) that it wasn't so much the invention part that allowed Intuit to win the battle, but the innovative way in which Intuit kept and grew marketshare. In an interview with News.com, the guy who ran Microsoft Money for a few years, noted that Intuit beat Money because they did a better job with the marketing.
Meanwhile, of course, it's worth noting that Intuit itself is now facing upstart challenges from web-focused startups like Mint and Wesabe, and some believe the company is discovering in its own way how smaller, more nimble startups can succeed against larger entrenched interests. Innovation is an interesting beast. The idea that big companies can always defeat smaller ones has been disproved many times -- but here's yet another example.
When Microsoft launched its new Bing search engine recently, we didn't really know what to say about it. Some of us felt like Microsoft was trying to win the last battle against Google, rather than looking ahead to the next one; others pointed to pieces saying that Bing seemed more about knocking off Yahoo than Google, which it looks to have already done; others still pointed to all the next great search engines that have emerged over the years, and failed to unseat Google (remember Cuil?). But none of us mentioned Microsoft's apparent efforts to grab lots of search traffic by making Bing better at delivering porn results. There's been a minor flap over the way Bing displays videos in search results: users can access videos directly from the Bing site, and play a thumbnail version of them by putting their mouse over a preview image. This means that companies, schools or anybody else who wants to block the porn with web filters would have to block Bing completely (Microsoft has given a workaround, but it's pretty cumbersome). The uproar comes despite the fact that it's not all that different to the results delivered by other engines when searching for porn, although Bing seems to be a bit more, uh, comprehensive. While this sounds like a juicy mistake, the more cynical out there might see it as an intentional effort by Microsoft to grab search-engine market share by making Bing great for porn surfers. After all, it only delivers the videos -- and other sexual content -- to users from certain countries, so it seemingly is possible for Microsoft to keep at least some of it out. But with all the attention Bing's grabbed because of the uproar, and not to mention the traffic from porn surfers, it's hard to imagine they're too bothered.
