No, Giving More Patents To Startups Won't Increase Innovation

from the not-this-again dept

This really isn't much of a surprise, given earlier statements from both President Obama and Commerce Secretary Locke concerning patents, but it's still a bit disappointing to see that one part of the latest administration plan to jumpstart more entrepreneurship is to make it easier for them to get patents. This is based on a falsehood: that entrepreneurs need patents to build businesses. This is a claim made up by patent attorneys that has little support in the reality of the trenches in places like Silicon Valley. While it does depend on the business you're in, good VCs rarely care about patents, since it's rarely the patents that matter. Entrepreneurship is all about the execution, and that's determined by the team, not some piece of paper. Instead, by making it easier to get patents, we just end up with more bad patents that make it harder for entrepreneurs to actually execute. What a shame.

Filed Under: entrepreneurship, gary locke, innovation, patents, president obama

Can You Speed Up Patent Reviews While Improving Patent Quality?

from the if-so,-how? dept

I caught most of Commerce Secretary Gary Locke's speech (to a surprisingly small audience) yesterday at CES. There really wasn't that much that was worth commenting on, as it was mostly filled with typical political platitudes, and statements that often were based on questionable assumptions. For example, when he spoke about patents, as he's done before, he talked up the importance of approving more patents faster. But, right after that, he also talked about the importance of increasing the quality of approved patents, and getting rid of bad patents. What he didn't explain is how the USPTO would deal with the inherent conflict. If you speed up the pace of approving patents, you're inevitably going to let more bad patents through. It's nice to just say you want to speed up patent approvals while improving the quality of patents, but you have to at least recognize that the two goals are clearly in conflict. There may be ways to mitigate that (though, I'm not convinced any would actually work all that well in the long run), but it seems like the typical political promises of things that work against each other, such as claiming to want to increase government funded social services, while decreasing taxes. The two concepts are inherently in conflict, but politicians make such promises all the time. Still, if Locke really believes it's possible to bridge that conflict, it would be nice if he actually explained how.

Filed Under: gary locke, patents, quality, speed

Obama Comes Out Against Censoring The Internet; Will He Veto Leahy/Hatch Censorship Bill?

from the questions,-questions dept

On Thursday, President Obama gave a speech to the United Nations that (not surprisingly) covered a lot of ground. But the bit that caught my eye concerned his commitment to a free and open internet without censorship:

We will promote new tools of communication so people are empowered to connect with one another and, in repressive societies, to do so with security. We will support a free and open Internet, so individuals have the information to make up their own minds. And it is time to embrace and effectively monitor norms that advance the rights of civil society and guarantee its expansion within and across borders.

Sounds good.

Around the same time Commerce Secretary Gary Locke was giving a speech at Georgetown University where he talked about some very similar points:

Today, I am announcing the official launch of an additional Task Force project -- one focused on preserving the global, Free Flow of Information on the Internet.

It's likely that many of you saw a recent cover story in The Economist alluding to "the Web's new walls."

The theme of the article is that the openness of the Internet is in jeopardy.

As the Internet has grown, and as it's become more central to the lives of people and to economies, we are seeing an increasing number of government policies around the world that restrict the free flow of information on the Web.

Many of these policy efforts, in particular those centered on censorship, have deep human rights implications.

Later on in the speech, he again worries about governments censoring the internet:

In recent years, however, we have seen a significant up-tick in threats to the free flow of information on the Internet.

Censorship continues to be a significant problem in too many countries, and a range of new Internet-related regulations, or other actions by governments around the world, are springing up as speed bumps on the information superhighway.

At one level, we are dealing with questions that concern national sovereignty. We recognize that enhanced efforts to combat cyber-crimes and to protect a nation's national security needs are necessary.

But there seems to be the growing risk that idiosyncratic regulations are implemented not to protect a state's legitimate interests, but rather to undermine fair competition or create market share for preferred businesses.

Again, all of this sounds good... but it makes me wonder how the administration feels about the new "Combating Online Infringement and Counterfeits Act" from Senators Leahy and Hatch, which set up a system that avoids due process to censor websites in a clear attempt to "undermine fair competition and create market share for preferred businesses."

Unfortunately, it seems likely that Obama and Locke are all for this kind of censorship. That's because the "preferred businesses" that are helped by the COICA are the ones who support Obama and Locke. After all, it was just a few weeks ago that Locke gave a speech where he completely sided with the entertainment industry on various copyright issues, highlighting bogus data and ignoring tons of evidence that contradicted the statements he was making.

Chances are we're going to see more hypocrisy in the government -- claiming to be against censorship designed to protect businesses in other countries, but all for it at home, when those businesses are the ones contributing campaign funds.

Filed Under: barack obama, censorship, coica, gary locke, orrin hatch, patrick leahy

US Commerce Secretary Sides With RIAA: Warns ISPs To Become Entertainment Industry Cops

from the sad dept

It's no secret that US Commerce Secretary Gary Locke is quite confused over intellectual property issues. There has yet to be a case where he's actually questioned a highly biased or debunked industry study on the issue, and he seems to enjoy celebrating with the entertainment industry, even as the government has debunked the studies he relies on. But it's really sad that he doesn't even seem to consider the other side at all. His latest move is to side with the RIAA and effectively warn ISPs that they need to become copyright cops for the entertainment industry establishment.

As you go through the text of his speech at Belmont College in Nashville (where I once spoke as well), it's really quite stunning how either uninformed Locke is or how purposely misleading he is. Neither speaks well for him:

Congressman Jim Cooper has made intellectual property protection a top priority of his as a co-sponsor of the pending Performance Rights Act. He is an outstanding senior member of congress who is committed to ensuring that the voices of Nashville are heard in Washington.

Except that the Performance Rights Act is not really about "intellectual property," at all. It's about the RIAA trying to squeeze more cash out of radio stations, despite the fact that in an open market, they know damn well that they get so much value out of radio that they constantly feel the need to pay radio stations under the table for the promotion. In other words, the Performance Rights tax is really an attempt to get radio stations to pay the record labels for the right to promote the music the RIAA wants to promote. It's a huge wealth transfer, and Locke should be ashamed of supporting such a policy that does little to actually help musicians, but plenty to help the middlemen.

Governor Bredesen has been at the forefront of protecting individual property as well in Tennessee. In November 2008, he signed into law a Campus Piracy Bill that requires public and private colleges and universities in the state to ensure that computers connected to their campus network are not being used for illegal file-sharing.

Only problem? An analysis of this law showed that it would actually cost Tennessee taxpayers over $10 million with absolutely no evidence that it would help musicians at all. Gary Locke is apparently all in favor of faith-based legislating on copyright law. That's scary.

Worldwide and certainly in the United States, consumers are spending less on recorded music in all formats. Recorded music revenues are down by almost half over the last decade.

Note that Locke conveniently ignores the fact that if you look beyond recorded music, overall spending on music and music related products has gone way up and (more importantly), much more of that money goes directly to artists, rather than to the middlemen. After talking about the Nashville floods -- which were indeed quite devastating -- Locke seems to compare them to file sharing:

But there are other problems that we have within our power to solve. And one of them is the rampant piracy of music, and of intellectual property, that are the lifeblood of this region's economy.

And I think it's important to lay down a marker about how the Obama administration views this issue. As Vice President Biden has said on more than one occasion, "Piracy is flat, unadulterated theft," and it should be dealt with accordingly.

Is it worth reminding people that Biden once was famous for his plagiarism of a law review article while he was in law school? Or is that just a cheap shot. Biden begged off that "mistake" by saying it wasn't "malevolent," so it should be forgiven. And yet, oddly, he doesn't seem to take that same stance towards people sharing the music they love.

This isn't just an issue of right and wrong. This is a fundamental issue of America's economic competitiveness.

Which is why you would think that Locke would actually be interested in all of the research showing that there's greater economic benefit with weaker copyright laws. Wouldn't you? Odd that he is not.

As the president has said before, America's "single greatest asset is the innovation and ingenuity and creativity of the American people. It is central to our prosperity and it will only become more so in this century."

Indeed. But no one should confuse copyright law with innovation, ingenuity and creativity. The two are not the same and, the research has shown, not even correlated.

Our founding fathers understood this as well as anyone, which is why they put in place a set of rules and laws to reward and protect the ideas and inventions of the artists, engineers and scientists who create them.

With clear limitations and statements of concern that such laws might be abused. Locke ignores that copyright law today looks nothing like it did when the founding fathers put it in the Constitution -- and that the concerns they raised have been totally ignored.

But this copyright and patent framework needs to evolve to meet the evolving challenges of the 21st century.

Hey, one thing we agree on... though I'm guessing that his form of "change" looks nothing like what it should actually be.

Recently, I've had a chance to read letters from award-winning writers and artists whose livelihoods have been destroyed by music piracy. One letter that stuck out for me was a guy who said the songwriting royalties he had depended on to "be a golden parachute to fund his retirement had turned out to be a lead balloon."

Well, there's your problem. Copyright was never supposed to be about welfare or a pension. Copyright has always been about providing the incentive to create in order to more freely share works with the world and -- eventually -- to increase the public domain. That Locke appears to think that copyright is supposed to be a musician's pension and welfare program is especially troubling. It suggests he doesn't even know what copyright law is.

To take just one area that I know is important to this group, in our government-wide strategy, we endorsed and affirmatively encouraged the private sector -- including content owners and Internet service providers -- to work collaboratively to combat intellectual property infringement online.

Especially to combat repeat infringement.

And there it is. Dear ISPs: become copyright cops. Even though the RIAA admits that it's impossible for them to combat such infringement, we feel that you should magically know how to do so, even though you have no way to know what is infringing and what is not.

None of this is surprising, of course, but it's too bad that no one calls Locke out when he makes such statements.

Filed Under: copyright, gary locke, music industry, recording industry

If Gary Locke Wants To Incentivize Commercializing Research He Should Look To Get Bayh-Dole Repealed

from the fix-the-problem dept

Commerce Secretary Gary Locke is apparently greatly concerned about getting more federally funded research out of university research labs and into the market:

"the United States cannot afford to merely fund research and say a prayer that some entrepreneur will commercialize it down the road,"

So he's asking for advice on how to improve the commercialization of federally funded research. Here's a simple and practical idea that he almost certainly won't consider:

Get the Bayh-Dole Act repealed.

Bayh-Dole, of course, was officially designed to do exactly what Locke is supposedly now looking to do. It specifically gave universities and other organizations the right to patent and control federally funded research, with the misguided belief that this would increase commercialization of federally funded research. The law was enacted thirty years ago, and we can now say, pretty conclusively, that it has failed and has only served to hold back commercialization efforts and to massively stifle federally funded research in a number of areas, through a series of (somewhat predictable, if you understand what monopoly rights do) unintended consequences.

Research studying the impact of Bayh-Dole found that it did not increase university research commercialization. Instead three things happened, all of which were bad:

1. First, tons of universities set up tech transfer offices because of Bayh-Dole. Thinking that the law would suddenly create a new revenue stream in licensing patents, universities spent heavily on setting up such offices to facilitate the transfer of patents to commercial entities. Unfortunately, patents, by themselves, are rarely that valuable, and most universities greatly overestimated the value of their patents. This hurt in multiple ways. Fewer patents than expected were licensable -- and even when a potentially licensable patent came up, the tech transfer office often valued it way too high, such that companies refused to license it, or if they did, were saddled with such debt that they couldn't build a real business. On the whole tech transfer offices have been a huge money loser for the majority of universities.
2. Second, Bayh-Dole actively stifled important research. Academic research has always been about active sharing of information, with different individuals testing, retesting, and modifying various hypotheses and tests. But with the focus on patenting, suddenly universities didn't want their professors sharing any more, greatly holding back the standard process by which research actually becomes useful.
3. Third, by focusing on patenting and creating an exclusive right around federally funded research, it limited what fields that research could be applied to for commercialization. That's because often, the licensing would be on an exclusive basis to a single company in a specific field -- blocking out all other potential commercialization routes.

If Locke is serious about improving commercialization of federally funded research, it's time to work with Congress to dump Bayh-Dole. Federally funded research is research paid for with American taxpayer money. To lock it up such that only a single organization can make use of it is a travesty, and is doing tremendous harm to both actual research and commercialization efforts. Instead, it's time to recognize that the drive to innovate comes from market needs and competition, not from gov't granted monopolies.

We've had nearly thirty years to witness that Bayh-Dole failed in its stated purpose. It's time to get rid of it.

Filed Under: bayh-dole, commercialization, federal funding, gary locke, research

Patent Office Decides To Rush On Green Tech Patents, Rather Than Give Them Scrutiny They Deserve

from the just-great dept

Jaewon alerts us to the news that the US Patent Office has agreed to fast track "green tech" patents to get them through the process much faster. This is the opposite of what should be done. One of the biggest problems is that examiners don't have nearly enough time to thoroughly examine a patent to make sure that it's really patentworthy (i.e., that it's both new and non-obvious to those skilled in the art). Speeding up the process seems like a recipe for a lot more bad patents -- which doesn't help the green technology space, it'll cause significant harm. We'll end up with more patent thickets, and a huge waste of money on legal battles, rather than actual innovation.

Yet, Commerce Secretary Gary Locke supported the plan by announcing:

"American competitiveness depends on innovation and innovation depends on creative Americans developing new technology," Locke said in a statement. "Every day an important green tech innovation is hindered from coming to market is another day we harm our planet and another day lost in creating green businesses and green jobs."

This statement makes a bunch of assumptions that simply are not supported by any evidence at all. First, innovation isn't just about new technology, but about successfully bringing the technology to market. Second, over and over again, studies have shown no causal effect between more patents and greater innovation. It's amazing that Locke can claim this as if it's fact when there's no evidence to support it. Third, there is no hindrance in job creation from a slower patent approval process. Companies can still bring their products to market and can still hire and grow whether or not they have the patent. There are plenty of "patent pending" products on the market. The idea that fast tracking green tech patents creates more jobs is pure fantasy. Apparently, when it comes to intellectual property, the policy of our federal government is entirely faith-based.

Filed Under: gary locke, green tech, patents, uspto

Commerce Secretary, New USPTO Head Suggesting They Want More Patents, Approved Faster

from the that-doesn't-seem-good dept

Two separate stories concerning statements from those in charge of the patent system suggest that the new administration isn't about to help fix the problems in the patent system, but is eagerly looking to make them worse. It starts with new USPTO Director David Kappos, who some thought would recognize problems with the patent system from his years dealing with those problems at IBM. While IBM is a massive patent stockpiler, over the past few years it's at least indicated some recognition that the system is broken. But... his recent remarks suggest he wants to reverse the trend of patent examiners rejecting so many patents:

On the subject of quality, there has been speculation in the IP community that examiners are being encouraged to reject applications because a lower allowance rate equals higher quality. Let's be clear: patent quality does not equal rejection.

I don't think I could disagree any more strongly. Patent quality absolutely means keeping out bad patents -- something the USPTO has failed at for years. Considering the massive monopoly power handed out by a patent, one should only be granted in the rarest of cases -- when real quality, and a real need for the patent can be shown. After a lot of criticism about the way that patent system was run for the past few decades (where "when in doubt, approve" was the norm) since about 2004, the USPTO has finally started to become more aggressive in rejecting patents. Having the USPTO switch back in the other direction would be a massive mistake.

Meanwhile, an even more worrisome issue is that Kappos' boss, Gary Locke, the US Secretary of Commerce, seems to buy into all sorts of disproved myths about the patent system. It doesn't help that the journalists at the Milwaukee Journal Sentinel seem to believe them too. Check out this quote, for example:

And economists concur that patents are the best known indicator of innovation.

Um, actually, a rather large number of economists do not concur at all on that statement (and note that two of those are Nobel Laureates), and can stack up study after study after study that suggests the opposite. But why let facts get in the way of an old myth?

The real problem, which becomes evident in reading the article is that since the USPTO is funded based on patent application fees, it has every incentive in the world, as an institution, to approve more patents. The more patents it approves, the more applications it gets, which means more money as well. This isn't to say that the individual examiners don't take their jobs seriously, and approve stuff just to get the fees. Obviously, they're not directly a part of that calculus. But the incentives put in place at higher levels are to bring in more fees to better fund the USPTO. Of course, if it functioned as originally intended, and only narrowly approved patents that were clearly shown to be a new and non-obvious invention that promoted the progress, the staff and the budget could be cut down significantly. But since when has a gov't agency ever willingly looked for ways to cut its own budget?

Filed Under: david kappos, gary locke, patents, uspto

Copyright Lobbyists Celebrate Latest Bogus Stats With Willing Gov't Officials

from the this-is-depressing dept

Every day, we see greater and greater evidence that too stringent copyright laws are harming creative efforts rather than encouraging them. The evidence is all around us and growing. But, very few in the government recognize this. They don't actually look at the real research on these things. Instead, they accept as gospel the ridiculous debunked research that comes out of the industry lobbyists who benefit the most from such protectionism that limits real and meaningful competition. And no one calls them on it. Take, for example, this Internet News report on how lobbyists for the music, movie and software industries all got together with Commerce Secretary Gary Locke, and talked up a new and misleading study from the International Intellectual Property Association that talks up the importance of copyright.

Unfortunately, the report has many, many problems. It mistakenly assumes that anything covered by copyright (i.e., any sort of creative output) is created solely because of copyright. Plenty of content/software/etc. is not created because of copyright -- but this study assumes that it is and that it needs to be protected -- even though for much of it, that's unlikely to be true. That leads to a very distorted picture, because it makes you automatically think that granting more copyright is better, even if much of that output would have been done anyway -- and even if there would have been more output without copyright. It falsely assumes that the production is because of copyright, rather than just covered by copyright.

But, with such bogus stats -- and gullible gov't officials -- it's easy to push for more protectionism and stronger copyright laws as being necessary to "protect" these industries. The industry officials went on and on at the get together, falsely blaming "piracy" for the music industry's troubles -- ignoring that real studies (i.e., not lobbyist-backed ones) are telling quite a different story. The overall industry is actually thriving -- in part because of the better ability to distribute and promote content and software at greatly diminished costs (often free). Ignoring these benefits, and treating them all as harm is a huge mistake.

But, it's these lobbyists and their bogus numbers that have the ears of our elected officials. What a shame. No one was invited to suggest the countering viewpoint or to show why the industry's numbers were clearly false. No one was there to discuss how stronger copyright actually harms creative output, and to show how these very industries have repeatedly fought against and shut down innovations that could have helped the economy. No one was there to question why politicians would simply accept industry-financed studies. And, no reporters seemed to have asked these questions, either. It's just politics and business as usual.

Filed Under: copyright, gary locke, lobbyists, politics, stats

VP & Commerce Secretary Suck Up To Hollywood, Cite Bogus Stats And Promise Misguided Action

from the just-what-wasn't-needed dept

The Obama administration continues to give in to pretty much every wish of the entertainment industry. At an MPAA-sponsored dinner, VP Joe Biden repeated a bunch of Hollywood talking point myths as fact, and promised stronger intellectual property enforcement. He incorrectly referred to file sharing as "pure theft," claimed that it hurt the economy (with no evidence to support that) and said that it caused lost jobs. Of course, the industry has been putting out bogus studies claiming such notions, but they're easily debunked when you look at the details. Biden also promised that the "IP czar" would be "the right person," which (given the audience was Hollywood execs) almost certainly means someone who will roll over and obey the industry, rather than focus on actually increasing innovation and protecting consumer rights.

Earlier at the event, Commerce Secretary Gary Locke noted that the recent leak of Wolverine "underscores the problem the industry faces," while saying that he "believes in the full and impartial enforcement of the law." Again, as has been discussed widely, the leak of Wolverine doesn't demonstrate any problem at all. Plenty of people will still go see the movie in the theater, and if the industry had reacted intelligently, it could have turned the leak into a marketing coup. Instead, it acted stupidly, and because of that, the administration is going to bend over backwards to help the industry keep acting stupid rather than adapt. What a shame.

These moves represent a real loss to the economy, society and culture. For whatever reason (money has a lot to do with it), the administration seems to have bought into the totally unsubstantiated claim that there is only one business model for entertainment (selling content), and thus it needs to create laws to make sure that such a business model works. In doing so, it's creating massive inefficiencies, decreasing content production and making it even more difficult for new and innovative business models and services to thrive.

Filed Under: gary locke, hollywood, ip czar, joe biden, politics
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