Average people suffering from copyright laws

Ars Technica published a brief article about the woes of an average legal MegaUpload user suffering because he cannot access his legal content. At the same time Techdirt, points out that there are several large companies (NBC) and prominent politicians (Lamar Smith) using copyrighted material and will likely not receive any sort of punishment for these infringements.

This isn’t exactly the most surprising turn of events. Most of these companies will likely settle or just open up their large portfolios of copyrighted material to Apple or whomever and strike a deal. As users we typically don’t have the same rights and are expected to give up our rights when we use services.

In many cases the content that users generate are the value of the website or service that is being used. This network externality comes from other people using and building the network for the site. I like to argue that perceived value of the iOS and Android operating system aren’t the systems themselves or the hardware they are on or the cellular network, but rather the applications that are available within these environments. For example look at the problem that Nokia and Microsoft are experiencing with their phones and application stores. The quality of the OS is second to the application environment. Nokia’s N-9 that would have used their Meego OS appeared to be an amazing piece of machinery, but it was killed before it ever got a chance. Mostly because Nokia didn’t think that it alone could build the application environment needed to make the product a success.

In the case of user created content, the user’s rights typically are minimal and likely to be changed at any time. I think part of the reason we consent to these agreements is through ignorance. We don’t really know what we’re agreeing to for two reasons. First, when we go to a website we don’t even know we’re agreeing to a terms of use. Second, because the terms of use are complicated. Some websites have taken to writing the agreements in plain English but that’s few and far between.

How can this change? First there will have to be legal challenges. In the case of user created content being sold to a third party based on some esoteric terms of agreement, the validity of these sales are going to have to be challenged in court. In some cases they will likely be over turned in others they might not.

Users will also have to fight against these agreements and refuse to accept them and potentially sue places that abuse the content that users put on the site or that allow third party sites to take their content without permission.

Balance between the large players and the users needs to be restored.

Edit: This story about HuffPo also highlights this imbalance.

Are patents going to impact how doctors treat a patient?

Today Ars Technica reported on a case before the US Supreme Court and how the court is assuming that the usage of scientific data, which has been publish, is a valid patent. This is a pretty scary scenario. What do you mean? Well, the patent is related to how the levels of some chemical impact the dosage of a drug. That’s it. If you have level X in your blood you should have dosage Y. The patent holder created a device to test the level of the chemical in your blood which then suggests a dosage level. The Mayo clinic developed their own test and  have been administering the test on their own without paying anything to the company. The arguments in the court essentially assume that this is a valid patent.

Should this patent be valid though? Seems like something that could be patented. Based on what is considered patentable, this should fall under mathematical formulas. Essentially, this is a matter of correlation and basic regression analysis. During a drug trial you can determine a correlation between the impact of a dosage of a drug on the current level resulting in a lower level of the chemical. This is really how all medicine works. If you can reduce costs by creating your own tests and administering it yourself then that’s great. Hospitals should be encouraged to do this if they are large enough.

This is what Doctors do. They read literature about the medicine the condition it’s supposed to impact and what sort of connection there is with the dosage levels and the response rate within the patients. Every doctor has to use a test to determine the level of a chemical or some condition. This can be the pulse (irregular heartbeats), blood pressure (pressure cuffs), blood sugar (A1 test) and the list goes on. In each case the doctor is able to assign a proper dosage prescription based on the study of patients. If a doctor was required to pay a licensing fee for each and every case of this our currently exorbitant costs of health care will seem cheap. Like when we used to complain about $1.50/gallon for gas.

The other problem with patenting something like this is that it’s likely to be highly unenforceable except for when a large institution like the Mayo Clinic. Individual practitioners will be safer than large clinics, but they could be impacted as well. If they are required to use an extremely expensive proprietary testing methodology rather than have the ability to use any testing method it will drive up prices and may put doctors out of business.

If the court rules on this as if these types of patents are valid, we will need to push to have patent law changed again. The last change moved things in general, in the right direction but a lot more work needs to be done.

The ACTA has been signed

For those of you who aren’t aware the US and many other countries have signed the Anti-Counterfeiting Trade Agreement or ACTA. This law provides a legal framework for nations across the world to enact something similar to the US Digital Millennium Copyright Act (DMCA). This framework gives additional control to law enforcement and copyright holders. Something also abnormal about this trade agreement is that the US claims that it doesn’t need congressional approval. I find this extremely odd, as it’s part of the charter of the legislative branch to approve trade agreements. Additionally, as I’m not a lawyer, I don’t understand what’s inherently different in the ACTA from the South Korean Free Trade Agreement, which has been stalled since Bush II.

At this point the EU hasn’t signed the agreement yet. France and Germany have both enacted some already strict laws in regard to the number of strikes an infringer can have before they lose internet connections.Of course there are some serious issues with the approaches that are used to accuse copyright infringers. most of them deal with how to identify a suspected infringer. At this time France’s first three strike infringer doesn’t know how to do that. Additionally, in Germany, where a legislator wants a 2 strike law, the same legislator has already violated this before the law has gone into affect.

I believe that these cases really indicate that legislator really don’t understand how the internet and copyright works. It’s clear from the DMCA that they don’t and neither do judges. However, I think that Judges are starting to seriously figure out what’s going on with copyright and the controls that are being put into place. Recently in several districts judges have severed joint cases of copyright cases, because most of the IP addresses, which are typically associated to a region or city, were outside the jurisdiction of the court they are being tried in. Additionally, some judges are noting that IP addresses aren’t people and other people could be using the IP address. Even more recently a judge writes that in the DMCA suggest if you own a DVD it’s ok to rip it.Which is something that the DMCA is trying to prevent. DMCA was design to prevent circumventing the copy blocking technologies. It made it illegal.

Overall, the ACTA is a huge blow for advocates of reducing or eliminating copyright. I seriously hope that if this trade agreement does have to go through the US congress that it will be rejected. It’s a law that doesn’t take into account the current technologies and what culture really means.

Fortunately, not all governments support the ACTA. In fact Brazil has created an interesting framework that is the antithesis of ACTA. It is designed to support privacy, encourage usage of Creative Commons copyright(left) protection and have true net neutrality.

Technological Layers and Layer Ownership

This ars technica article outlines in extraordinary detail what is at risk in the smart phone wars. It discusses the various different layers involved with the smart phone industry. These layers are extremely important. Control of a layer allows you to move into another layer and can help you extract monopoly rents* from those layers as well. My friend Sean was complaining about bloatware** earlier today that comes a computer supplier. They are actually attempting to get into a different layer. If a PC company is able to provide support which can allow them to get money from a customer on a returning basis, monthly or yearly, they can help ensure return purchases on more expensive purchases as well as getting a lot more money out of first sale. Additionally, the manufacturer may also be using the bloat ware they install to subsidize the cost of the product you bought. If a third party asks to have software pre-installed the manufacturer could ask for money to put it on, which may be passed to you as a consumer, so you could get a computer at a slightly lower price.

Ars Technica, isn’t the only group of people that views this phenomenon as a stack with different layers in it. This is actually an economic model as well. Which was used in the original Microsoft EU case explaining how these different layers can be leveraged to foreclose on a new market.

Another way of looking at this is in a traditional manufacturing sense. When you are making a car you have many different suppliers. You have paint, tires, batteries, steel, etc… There are several different ways to make it cheaper for you to produce a car. You can become vertically integrated, with a very high production level, where you make the steel, tires, paint and the full car. If you were extremely good at producing steel you would be able to get the steel at cost whereas traditionally you would have to pay a higher cost so the producer could earn a profit.

We can see this same sort of thing happen within IT. There is serious concern with corruption of content and content providers, like Comcast, purchasing a wide range of companies. If they control the material and access to the material they could control what people can access and impact society in a serious manner.

I don’t think that Comcast is going to be able to significantly impact the smart phone layers as they have with TV. However, a company like Google or Apple definitely could. Google is actually attempting to get into every single layer in this market. They tried to purchase wireless spectrum (they are also installing a super fast network in Kansas City), they are going to purchase Motorola, they have an OS and they are an app provider.

I think that other technology companies are aware of this. This is part of the reason why Google is being attacked on all sides. While until Google gets a hold of Motorola, they will be mostly in the top most two layers, OS and Applications. Google is clearly trying to move into every layer possible. This will allow them to have the greatest likelihood of a customer going onto a website and click an ad to give them money.

To prevent this, almost everyone is suing Google or some aspect of their technologies. Google is trying to get around this. They want the control.

I’m going to be gone for a little while. My brother is coming into town and I’ll be in Amsterdam for the next few days and then Munich this weekend. Hopefully I’ll have a post up Thursday or early next week.

Further Reading: The New ICT Ecosystem by Martin Fransman

*monopoly rents means higher prices from controlling the market. It allows a manufacturer to sell a product for a higher price than they would be able to do under a competitive market. Microsoft is able to do this with Windows. However to protect themselves from other OS providers undercutting their prices, MS sells the same OS at lower price points. They give discounts to students and charge a lower price in poor countries. This allows them to increase their monopoly to new markets.

**excess software which slows down a computer or smart phone.

Software Patents are the new Copyright

In one of my previous posts I commented that I was seeing a convergence withing copyright activities. I believe that something just as horrible is starting to happen within the software patent world. I think that it will threaten the free software movement as well. We’ve had patent trolls around for a long time now. Almost since the first patent was created, however, this didn’t interact with our daily lives. It was similar to the way that copyright didn’t affect you and me on a daily basis. Sure, changes in prices or the removal of a product could affect us, but typically we were able to find a replacement or dealt with the price change. However, I think that this new type of patent troll is more dangerous. Yesterday I saw a post on Ars Technica discussing how Lodsys is going after Apple app developers. Apple isn’t happy about this at all, because it threatens to ruin the base they have developed.

I think there are some other problems with this as well. Historically, if a company, that produces software, was looking to go for an IPO or bought by another company there’s a thing called due dilligence, where the products are checked for stolen code. This is a big deal, because if I stole the code from Linux or some other open source software, my entire project falls under the GPL, and forces my source code to become open as well. This can create massive headaches for companies.

There is a key difference between what used to happen in the past and what is happening now. Before it was the method of making something happened that mattered. For example if I took a really fast way to sort something from open source how it was sorted was what mattered, not that it sorted. Why does this matter? Well the code is also technically copyrighted and owned by the writer. Now the outcome matters as well. What if some one had a patent on sorting. I’ve mentioned how crazy this would have been in the past and how this would impact innovation.

Let’s say some one decided to put in for a patent on shooting animals at some sort of target through a controlled interface. Once the animal hit the target the animal interacted with the target which changed the user interface to indicate that the change had occurred. I have two games on my phone right now, Angry Birds and Monkey Blaster that would both be impacted by this patent. Both of them have very different goals and methods for shooting an animal at a target and different results once it hits the target. Indeed, the definition of target is different between these two games. However, neither of these developers are going to be looking for patents when they have an idea about what’s the next game they want to make.

The patent that is mentioned in the Ars article is absurd. It should never have been approved. There’s nothing novel in the development of the in app purchase. That is something that should be obvious from any one in the computer industry. You could easily see the relationship between a website and an application. In fact, I’m sure that there have been cases of this in the past. Another question that remains to be seen is this going to impact services like Steam? The article notes that Lodsys has already gone after EA.

This change in behavior towards apps and software patents is a very bad change. We need to work to address these types of problems. Returning to the requirement of producing a product to have on the market within a certain number of years could help address these problems. However for software this will likely just lead to a crappy product put on the market that no one buys and no one knows about.