Does Patent Licensing by Patent Trolls - Or Anyone - Serve A Useful Purpose?

Patent trolls -- sometimes known more politely as "Non-Practising Entities" (NPEs) -- probably have few fans among Techdirt readers, but there are some who try to justify their activities. Here's how the argument usually goes:

Defenders of patent trolls ... argue that they serve as business intermediaries between inventors and commercializers. While the traditional theory of the patent system is that patents encourage innovation by allowing inventors to exclude competitors from the market and therefore earn supracompetitive returns, a number of scholars have argued that the patent system can encourage commercialization of inventions once they are made by allowing the inventor to control who can develop the technology.

That comes from an interesting new paper from Robin Feldman and Mark A. Lemley, which explores whether patent trolls really do fulfill this theoretical function in practice. It's long and detailed, but its results are pretty clear-cut:

Based on our preliminary evidence, the theory that NPEs facilitate innovation either through the creation of new products or by delivering actual technical know-how from inventors to implementers doesn’t hold water. NPEs almost never actually provide any valuable information to their licensees, and they rarely, if ever, prompt the development of any new products. Licensees are paying for freedom to operate -- the right not to be sued for implementing technology they developed on their own but which someone has asserted will fit within their patent rights. Thus, the study does not support the efficient middleman hypothesis for characterizing the role of NPEs.

That's a valuable contribution to the debate about patent trolls, but the paper offers other insights. For example, it finds that not only do patent trolls not bring about much technology transfer with their patent licensing, neither does anyone else, either:

That doesn’t mean technology transfer doesn’t happen; it does. But it may mean that technology transfer happens early in the life of a technology, and that secrets, collaborations, and informal know-how, not patents, are the primary focus of real technology licensing agreements.

That's an important point. The paper also provides yet more evidence that the 1980 Bayh-Dole Act, designed to encourage the commercialization of research results through licensing, actually turns universities into patent trolls -- something that Techdirt has discussed before. Although the authors suggest that further research is needed to confirm their results, it already seems pretty clear that both patent trolls and Bayh-Dole need to go.

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Google VPN is on its way

If using your Android device on an open Wi-Fi network fills you with dread, fear not. Google is working on a VPN service that will ease those worries.

Awesome Stuff: Tinkerer Tech

For this week's awesome stuff, we've got an assortment of technological tidbits for folks who like the customizable, the utilitarian, and the scientific.

Trickey: Any Key, Anwhere

For all the huge variety of input devices on the market, there is a surprising dearth of truly customizable ones. Some gamer's keyboards have settings and configurations and maybe a few modular pieces, but Trickey takes things to new level with a very simple idea: building the function for each key into the key itself, rather than into the board it connects to. This way, rearranging your input is as simple as popping out keys and plugging them in where you want them. It's a great idea that definitely has applications for gaming and a wide variety of design and creative tasks that use special software, but its one big drawback is the expense: unless the relatively small modular units can be brought down in price, building anything more than a simple four- or five-key custom interface is probably more than most people will want to shell out for.

The PocketLab

Smartphones have put a wide variety of advanced sensors into everyone's pocket, but as useful as this is, there are limits based on the fact that you usually want to keep your phone close and not put it in a great deal of danger. The PocketLab offloads these sensors — a barometer, accelerometer, thermometer, magnetometer and gyroscope — into a rugged standalone unit that communicates with your phone and the cloud. Now the readings-curious can strap it to a rocket, toss it off a cliff or subject it to whatever other abuse seems likely to produce some interesting data.

VIS: Useful Power

USB power banks are everywhere these days, with little to distinguish them other than price and capacity. But the creators of VIS realized that a portable battery can have all sorts of additional uses beyond charging your devices, and built them into a slick-looking unit. The VIS serves as a flashlight, and emergency lantern and — in an inspired bit of design that suddenly feels obvious — a jumpstarter for your car with the included jumper-cable attachment.

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Unlock new insights from machine-generated data in real-time

Is your IT team getting the most insights possible from machine-generated data? If you don't know, Splunk's Tapan Bhatt recommends combining new and existing data sources.

Leveraging the power of digital signatures

Digital signatures can replace physical signatures for a more efficient and streamlined authorization process. Learn about what they can do and how they work.

France Says Corporate Sovereignty Must Come Out Of CETA, Or Be Replaced By Something Completely Different

There are so many massive trade deals on the go at the moment that it is easy to lose track. In the US, TPP is at the forefront of many people's thoughts; in Europe, it is TAFTA/TTIP. TISA is just starting to appear on the radar, while CETA, the trade agreement between the EU and Canada, is dropping off it. That's because there is a general belief that CETA is "done" -- even if the text needs "legal scrubbing", the assumption is that no more changes can be made. Evidently, somebody forgot to tell the French government, which is calling for the corporate sovereignty chapter to be dropped according to this article in Le Devoir (original in French, found via @StuJT):

Although he is generally in favor of this agreement [CETA], the [French] Secretary of State [for External Commerce] considers that before ratifying the treaty it will be necessary either to withdraw current sections on ISDS or rewrite them entirely. Moreover, the opinion of [the French Secretary of State] Matthias Fekl represents not only the official position of France, but also a consensus shared by Germany and the European social democrats. In the daily Le Monde, he said on Wednesday that the only options remaining on the table were "the withdrawal, pure and simple, of ISDS or coming up with something new." There is therefore no question of the Secretary of State signing the Canada-EU treaty without "inventing something new, that is no longer [investor-state] arbitration, but a new way to settle disputes, by integrating public courts in the procedure."

That position will be a massive spoke in the wheel for the ratification of CETA, since there is no indication Canada would be willing to remove or renegotiate the corporate sovereignty provisions there. It's also interesting that Germany is mentioned in this context: its position on ISDS has been rather inconstant -- as has France's, for that matter -- and the latest news would seem to indicate that things are still up in the air for that country too.

The declaration of the French Secretary of State undermines a speech made very recently by the European Commissioner responsible for trade and TTIP, Cecila Malmström, at a meeting with the International Trade Committee of the European Parliament. Here's the context she gave:

the vast majority of the individual responses [to the Commission's consultation on corporate sovereignty last year] rejected either TTIP in its entirety or ISDS more specifically. But the responses from interest groups representing groups of people were more mixed.

Let me be clear on how we interpret those results. The consultation was not a referendum even if the responses showed huge scepticism and concerns about the system.

What the consultation did do is allow us to understand the main concerns about the system and give us ideas for how to address them.

In other words, we are going to ignore what 145,000 people said, and retain the anti-democratic corporate sovereignty structure intact. Malmström then goes on to give some specious reasons why ISDS must be kept in TAFTA/TTIP, albeit in a modified form -- and yet strangely omits to mention a far simpler solution, which is for companies that are worried about their foreign investments to take out insurance -- for example, from the World Bank's Multilateral Investment Guarantee Agency.

She then tries to suggest that CETA's ISDS chapter can act as a template for TTIP -- even though a detailed analysis from the Canadian Centre for Policy Alternatives indicates that the new corporate sovereignty provisions it contains are still deeply flawed (pdf). But if France really does stick to its view that ISDS must be removed from CETA, or replaced by a completely different mechanism, the argument that CETA's corporate sovereignty approach shows the way forward for including ISDS in TAFTA/TTIP collapses. Expect the European Commission to ignore this inconvenient fact, and to press on regardless.

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UMG Licenses Indie Artist's Track, Then Uses Content ID To Claim Ownership Of It

If nothing else, Universal Music Group is becoming a case study for everything that's wrong with YouTube's takedown system. Between nuking its own artists' official videos, targeting MegaUpload's video simply because it utilized some of its roster and using its direct partnership with YouTube to blow past any fair use considerations, UMG has been able to wreak a fair amount of havoc.

Its latest demonstration of its "my rights are bigger than yours" attitude towards IP protection has managed to yank someone else's creations right out from under their creator, as TorrentFreak reports.

Norwegian musician Bjorn Lynne… has had two of his videos hijacked by Universal Music Group (UMG) which is now running ads alongside his work.

“Can I just state publicly that I hate Universal Music Group. For the second time now, they have hijacked my music and claimed ownership of it in all YouTube videos that include my music, thereby monetizing my music,” Lynne writes.

Lynne isn't exaggerating. UMG owns the rights to an audiobook that uses one of Lynne's songs as a backing track. No problem up to this point, because anyone -- even UMG -- can use Lynne's tracks if properly licensed, which this apparently was. No, the problem is that UMG is claiming -- by proxy -- that it "owns" Lynne's track.

UMG have entered the audiobook in YouTube’s Content-ID system, and as a result they’ve hijacked the ads on the original video.

Which is why leaving infringement detection up to algorithms is a bad idea, even if doing otherwise is technically unfeasible. According to Content ID, the backing track belongs to UMG. That's a problem, but it's a fixable one. All it would take is for UMG to release the claim after having the error brought to its attention. But UMG clearly isn't in the business of resolving disputes. It's just there to claim everything Content ID says belongs to it, even when the content clearly doesn't.

“One thing would have been to have done this unwittingly, by mistake. But I have ‘disputed’ the claim on YouTube, written an explanation and told them about the origins of this music — then waited the FULL 30 DAYS that the claimant has to process the dispute, only to be told that UMG have reviewed the dispute and UPHELD their claim!” Lynne notes.

That's the process available to indie artists: sit back and let major players claim your stuff. If Company A rejects your dispute, the decision is final. In YouTube's eyes, the burden of proof always falls on the accused and the existence of proof ultimately has no bearing on the outcome. All the claimant has to do is push the "REJECT" button and someone else's ad money will be rerouted.

Lynee could fight this further, but it would take a stack of money and some ambitious lawyers -- neither of which most indie artists have at their disposal. The only thing UMG has to do is what it did: shrug and return to siphoning money away from Bjorn Lynne. The system works -- at least for the major players. For everyone else, it's just a matter of trying to mitigate the damage they can't prevent, much less reverse.

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