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Authors to DOJ: “Strong patent rights are vital to U.S. economic and security interests”

The United States Supreme Court and the Congress have moved to weaken patents over the past seven years without realizing the inherent danger to national interests.  

“Strong patents rights are vital to the economic and national security interests of this country,” say James Rill and David J. Teece in an article published last week, The DOJ must Exalt Intellectual Property Rights,” in RealClear Markets.

The article states that the U.S. Department of Justice must use its power to move intellectual property rights like patents into mainstream acceptability, and prevent them from being undermined “under the guise of anti-competitive behavior.”

Authors James Rill, Senior Counsel at Baker & Botts, served as Assistant Attorney General for Antitrust at the U.S. Department of Justice; David J. Teece is Professor in Global Business and director of the Tusher Center for the Management of Intellectual Capital at the Walter A. Haas School of Business UC Berkeley and a renowned economist.

“Assistant Attorney General Makan Delrahim’s recent policy statements and enforcement actions have re-asserted the historical value of intellectual property rights,” say Rill and Teece.

“He has suggested that the value of these rights have been inappropriately curtailed by the misapplication of antitrust principles, which could threaten the future of U.S. innovation efforts. As a result, AAG Delrahim has begun to restore the balance between antitrust and intellectual property rights, and has moved this important issue to the forefront of antitrust discourse.”

For the full article, go here.

Better Incentives Needed

Also published last week by Professor Teece in Competition Policy International, is a related in-depth article, “Enabling Technology, Social Returns to Innovation, and Antitrust: The Tragedy Of Depressed Royalties.” 

“Empirical studies show that almost all classes of R&D activity are under-supported,” argues Professor Teece. “Two in particular are grossly under-compensated: (a) basic research and (b) enabling (or general purpose) technologies… consideration needs to be given to amplifying, not diminishing, incentives for upstream investment in R&D. Such investment is perhaps among the most precious that society makes.”

Teece cites Nobel Laureate economist Douglass North on the impact of innovation incentives:

Throughout man’s past he has continually developed new techniques, but the pace has been slow and intermittent. The primary reason has been that the incentives for developing new techniques have occurred sporadically. Typically, innovations could be copied at no cost by others and without any reward to the inventor or innovator.

Recent efforts to enlist antitrust as a lever against patents, says Professor Teece, “have threatened to undermine incentives for R&D in several important areas.”

Subtle, theory-based antitrust arguments around patent “hold up” are a handy disguise for implementers and antitrust agencies to use to under-reward and thereby under-incentivize legitimate innovators.

Image source: cjnotebook.com; wsj.com

 

“What kind of man owns his own computer?” Ben Franklin knows

Invention is about the future. Looking back at the technology and images that defined us, however, can provide an idea of where we are headed.  

A case in point is the Apple II personal computer. The ad below appeared in the venerable Scientific American magazine in May 1980. It seems almost laughable in its blatant appeal to the ego, although it was on the certainly on track about the PC’s ability to empower individuals and encourage creativity.

Ben Franklin designing the kite that helped to discover electricity (below) is a provocative image. Franklin was the original “scientific” American – statesman, inventor, writer. The Apple II, introduced in 1977, came with 4K of memory, expandable to 48K.  Its CPU speed was rated at 1 MHz. It was the kind of tool that could make genius even better.

Below is the original ad for the Apple II (full text is below the ad for easy reading).

What kind of man owns his own computer?

Rather revolutionary, the whole idea of owning your own computer? Not if you’re a diplomat, printer, scientist, inventor… or a kite designer, too. Today there’s Apple Computer. It’s designed to be a personal computer. To uncomplicate your life. And make you more effective.

It’s a wise man who owns an Apple.

If your time means money, Apple can help you make more of it. In an age of specialists, the most successful specialists stay away from uncreative drudgery. That’s where Apple comes in.

Apple is a real computer, right to the core. So just like big computers, it manages data, crunches numbers, keeps records, processes your information and prints reports. You concentrate on what you do best. And let Apple do the rest. Apple makes that easy with three programming languages— including Pascal—that let you be your own software expert.

Apple, the computer worth not waiting for.

Time waiting for access to your company’s big mainframe is time wasted. What you need in your department on your desk is a computer that answers only to you…

Apple Computer. It’s less expensive than timesharing. More dependable than distributed processing. Far more flexible than centralized EDP. And, at less than $2500 (as shown), downright affordable.

Visit your local computer store.

You can join the personal computer revolution by visiting the Apple dealer in your neighborhood. We’ll give you his name when you call our toll-free number (800) 538-9696. In California, (800) 662-9238. Apple Computer, 10260 Bandley Drive, Cupertino, CA 95014.

________________

A Manly Man

Note the ad’s manly images. (I guess 1980s women didn’t need a computer.) Ben Franklin was never a pinup for machismo, although he was said to be quite the lady’s man… $2,500 in 1980 is equivalent to about $8,000 today – a price almost no individual would be willing to pay for a personal computer. Computers have gotten smarter and smaller; people, not so much.

In 1980:

  • U.S. President Jimmy Carter proclaims a grain embargo against the USSR with the support of the European Commission
  • The Rubik’s Cube makes its international debut at The British Toy and Hobby Fair, Earl’s Court, London
  • The 1980 Winter Olympics took place in Lake Placid, New York
  • The United States boycotted the 1980 Summer Olympics in Moscow because of the Soviet invasion of Afghanistan
  • Pac-Man, the best-selling arcade game of all time, is released in Japan

Another print ad introduced the Apple II in September 1977. It included a $598 board-only version for “do-it-yourself hobbyists.”

And while we are on the subject, Autobiography of Benjamin Franklin, available for free, here, is an unusually timely and readable work, especially for anyone interested in invention and the creative process.

Frank Woodworth Pine wrote that it was “the most remarkable of all the remarkable histories of our self-made men.” with Franklin as the greatest exemplar of the “self-made man”.

Image source: http://blog.modernmechanix.com; technobezz.com

Rep. Collins speaks from IP experience at CIPU-GIPC innovation policy forum

On Tuesday an open briefing was held in Washington to better understand U.S. innovation and IP policy. Congressman Doug Collins (R-GA), a supporter of strong and certain IP rights, launched the event with a personal account of his exposure to IP rights growing up in rural Georgia. 

He said that a number of his relatives and neighbors were chicken farmers, “some of whom invented new and more effective processes to produce and process eggs and poultry that were protected under IP law.”

The keynote comments of the Congressman were part of a program, “Innovation Policy and Intellectual Property: Building on a Strong Foundation,” held by the Center for Intellectual Property Understanding (CIPU), an independent non-profit, and the Global Innovation Policy Center (GIPC), a division of the United Stated Chamber of Commerce.

House Judiciary Committee

Congressman Collins is a member of the House Judiciary Committee, and also is on the sub-committee for the Courts, Intellectual Property and the Internet. He was a sponsor of the recently enacted, and broadly supported Music Modernization Act, which passed the House 415-0, and has developed and supported other IP-friendly legislation. “IP is a part of the fabric of the nation,” he said. “American freedom is tied to an effective IP system.”

Other presenters included CIPU board member Marshall Phelps, former Vice President of IP Business and Strategy at Microsoft and prior to that at IBM. Mr. Phelps also served as head of Government Relations for IBM in Washington in the 1980s, and previously was head of Asia-Pacific. He spoke about the threat to technology posed by “Japan, Inc.” in the Eighties, and how the U.S. was able to surmount the threat with the right combination of incentives.

“The threat to IP and innovation from China is real,” said Phelps in his introductory remarks, “but too much policy and the wrong incentives can create bigger problems. Making patent certainty a higher priority should be the first priority. Putting IP properly on the balance sheet would help, too.”

Manny Schecter, Chief Patent Counsel of IBM, also a CIPU director, and president of the Intellectual Property Owners (IPO) Education Foundation, was a panelist, as were, Alan Marco, former USPTO Chief Economist, Rob Atkinson, a pro-IP economist and President of the Information Technology and Innovation Foundation (ITIF), and Professor Adam Mossoff, an IP scholar and policy expert at George Mason University Scalia School of Law.

Among the goals of the panel was to explore:

  • What is U.S. innovation policy?
  • How does it relate to intellectual property?
  • Who should be responsible for it?
  • How should success be measured?

Audience Response

One the audience members asked if the Supreme Court, with Oil States and several other decisions, was “anti-IP.” The panel did not believe so, but thought that SCOTUS members may be poorly informed about the purpose and use if IP rights.

Another audience member stated the false narratives around phrases like patent “trolls” were part of a long-term “public relations campaign” that has seeded anger and hostility toward IP rights in general. He thought a sustained educational initiative could help to make the role of IP clearer for various audiences.

Image source: GIPC

USPTO Director Iancu will keynote 2018 IPBC Global in San Francisco

An impressive group of speakers, sponsors and supporters, led by USPTO Director and Undersecretary of Commerce, Andrei Iancu, will be featured at the 11th global Intellectual Property Business Congress in San Francisco, June 10-12 at the Palace Hotel.

Director Iancu has indicated that he will support the long-awaited move to greater certainty in the U.S. patent system.  In a recent speech to the U.S. Chamber of Commerce he said that “reclaiming our (U.S.) patent leadership is within reach.”

Attendees will be eager to hear about Director Iancu’s strategy for attaining this and other goals.

IPBC Global 2018 plenary’s and panels include:

  • Will the U.S. Continue to Lead in IP?
  • CIPO Scenarios: The Good, Bad and Ugly 

IP CloseUp editor, Bruce Berman (that’s me), will be a member of the patent quality panel:

  • Is patent quality a distraction? – all that really matters is patent eligibility

    -What is a quality patent?
    -Controversy around eligibility
    -The importance of predictability

For the AI panel, participants will include Bart Eppenauer, former Chief Patent Counsel at Microsoft and William LaFontaine, General Manager, IP, IBM.

  • The World of Artificial Intelligence 

For the IPBC Global 2018 program, go here.

For the full list of speakers and their biographies, go here.

To register, go here.

Image source: ipbc.com; ipwatchdog.com

Family Entertainment: This “Rube” saw the future and its foibles

San Francisco-born Reuben Garrett Lucius “Rube” Goldberg, an American cartoonist, sculptor, author, engineer, and inventor, best known for satirical cartoons that depicted complicated devices that performed simple tasks in creatively complex ways.

But Goldberg, born on July 4, 1883, was also a visionary, who saw the impact of personalized communications decades before it occurred. His Forbes cover,“After Color TV: The Future of Home Entertainment,” from March 15, 1967 (below) depicts a family with each member engaged with its own mostly flat screen and targeted content – including the baby and cat. Recall that in 1967 the idea of the color TV, aka “talking furniture,” was still relatively new.

Future Family: Alone Together

Note the types of content, the different screens and the interactive controller used by the father. The baby’s wind-up truck does not have a chance.

The Fun of Getting There

Goldberg is associated with popular cartoons depicting gadgets that perform simple tasks in indirect or complicated but imaginative ways, giving rise to the term “Rube Goldberg machine” for s similar gadget or process. Goldberg received many honors in his lifetime, including a Pulitzer Prize for his political cartooning in 1948.

Goldberg was a founding member and the first president of the National Cartoonists Society, and he is the namesake of the Reuben Award, which the organization awards to the Cartoonist of the Year.

He is the inspiration for various international competitions, known as Rube Goldberg Machine Contests, which challenge participants to make a complicated machine to perform a simple task (kind of the opposite of an invention, which attempts to solve a problem or improve efficiency).

The contest, in which college or high school students build devices to complete a simple task in a minimum of twenty steps in the style of Goldberg, is held throughout the United States, and local winners are eligible to compete in the national contest.

Rube Goldberg reminds us that how a simple problem gets solved can be as fascinating as the solution.

Source: imgur.com

Blockchain patent applications doubled in 2017 to more than 1,200

 1,240 blockchain patent applications were filed worldwide in 2017, up from 594 in 2016 and 258 in 2015. 

Among the leading filers were Bank of America, MasterCard, Goldman Sachs, Walmart, JP Morgan, and IBM.
According to data collected by the Korean Intellectual Property Office, and reported in CryptoCurrency, more than 1240 applications for blockchain-related patents were filed across South Korea, the United States, Japan, China, and Europe by the end of January 2018.

In December of 2017, CNBC reported that ‘patent trolls’ were coming for blockchain individuals and entire firms who seek to make fortunes off of amassing blockchain patents.

“Crush it”

“Nick (sic) Spangenberg, a notable patent entrepreneur,” reported the publication, said that his firm IPwe “is also looking to make big money by reforming the whole patent world.”

“It is a curious path how a collection of misfit trolls, geeks and wonks ended up here—but we are going to crush it and make a fortune,” said Spangenburg.

Image source: codeburst.io

They shall overcome: Classic song’s copyright is invalidated by non-IP attorneys

The iconic protest song, “We Shall Overcome,” is now in the public domain after a small team of primarily non-IP lawyers succeeded in having its copyright invalidated.  

The settlement with publisher Ludlow Music, according to Law360, “which for decades charged fees for use of the civil rights anthem — came after nearly two years of class action litigation aimed at freeing the song from copyright protection.”

The suit, filed by the filmmakers behind “Lee Daniels’ The Butler” and others who wanted to use the song, argued that “Overcome” was merely a repackaging of a century-old African-American spiritual, meaning it couldn’t be locked up with a copyright. Last fall, a New York    judge agreed.

Under the terms of the deal, Ludlow Music will return the licensing fees paid by the plaintiffs and will no longer claim a copyright to the song. The tune, the publisher said, will be “hereafter dedicated to the public domain.”

Free at Last

The copyright invalidation of “Overcome” is the latest victory for lawyers from Wolf Haldenstein Adler Freeman & Herz LLP, whose focus is social justice, consumer protection and labor law, reported the newsletter, and is rapidly becoming the authority for lawsuits aimed at proving that a famous old song should be in the public domain.

Those lawyers, Randall S. Newman and Mark C. Rifkin, famously won a court order in 2015 over the ubiquitous “Happy Birthday to You,” eventually securing a similar public domain agreement and $14 million in repaid licensing fees. That victory led to the “Overcome” case, as well as another pending case challenging the copyright to “This Land Is Your Land.”

In a telephone interview with Law360, Newman and Rifkin said they hadn’t exactly set out to corner the market on freeing famous songs — neither had done much copyright work prior to these cases — but that they welcomed their newfound niche.

“Please don’t call us the caped crusaders of copyright,” Rifkin joked. “But somebody has to hold owners accountable for misuse of a copyright like we saw in these cases.”

For the full Law360 story and links, go here. 

Image source: eurweb.com; cdandlp.com

Study finds that black, hispanic and women inventors lack opportunity and role models

Economic hardship and lack of exposure to innovation are preventing minorities, low-income backgrounds and women from becoming inventors. 

Those are the findings of “Lost Einsteins: Innovation and Opportunity in American,” conducted by the Equality of Opportunity Project (EOP). The study was conducted by researchers from Stanford, Harvard, the London School of Economics and MIT.

EOP analyzed the lives of more than one million inventors in the United States to understand the factors that determine who becomes an inventor in America.

“If women, minorities, and children from low-income families invent at the same as high-income white men,” the study concluded, “the innovation rate in America would quadruple.”

Patent Grants vs. Patent Success

Dramatic differences in patent grants do not account for lack of patent success.

The report did not examine reasons for the failure of  “advantaged” inventors – those from better socio-economic background – to establish businesses, generate licenses and otherwise contribute successfully to innovation and technology. This may more likely be a result of weakened IP laws under the American Invents Act and a general lack of support for inventors, including those associated with corporate research departments and research institutions.

The study concluded that children who excelled in math were far more likely to become inventors but that being a math standout was not enough. Only the top students who also came from high-income families had a decent chance of becoming an inventor.

Low-income students who are among the very best math students – those who score in the top 5% of all third graders – are no more likely to become inventors than below-average math students from affluent families.

While minority inventors certainly should be nurtured, the high failure rate of innovators who had the benefit of and privilege raises serious questions about whether financial support and role-models are the only resources bright people from minority groups need to succeed.

The full Intangible Investor, “Minority Inventors ‘Lost,'” in the March IAM magazine, go here

Study documents for the Equal Opportunity Project – including an executive summary, slides and a paper – can be found here

For the summary slides alone, from which the above images were generated, go here.

Image source: equality-of-opportunity.org

Royalty rates paid musicians decline for some streaming services

When it comes to getting paid, the bigger streaming service is not necessarily better for most musicians and song writers.

While the revenue and market share have grown for the leading streaming services, some significantly, the royalties paid to artists have been declining.

According to a recent article in The Trichordist, a publication dedicated to the protection of artists rights in the digital age, streaming royalties paid to artists declined in 2017.

The blog took snapshots from a major indie portfolio for 2017, 2016 and 2013. It found that “when streaming numbers grow, the per stream rate will drop.”

This data set is isolated to the calendar year 2016 and represents a label with an approximately 150 album catalog generating over 115 million streams, a fairly good sample size. All rates are gross before distribution fees.

Spotify was paying .00521 back in 2014, two years later the aggregate net average per play rate dropped to .00437 in 2016, a reduction of 16%, reports the Trichordist. The current effective per stream rate at Spotify has now dropped to 0.00397, a reduction of 9% since last year. This a cumulative reduction of 24% since 2014, which is an average decrease of 8% a year of the per stream rate.

Business Model Questions

“If the music business could set a per stream rate that allowed revenue growth, proportionate to consumption growth that would be a much better model,” said David Lowery, editor of The Trichordist and leader of the band Cracker and Camper Van Beethoven. Lowery teaches in the Music Business Certificate Program at Terry College of Business, University of Georgia.

A notable change from last year is that Pandora replaces YouTube with the greatest value gap of streams at 21.56% volume with only 7.86% of revenue. YouTube drops to 8.38% of volume with only 1.70% of revenue.

Indie Label Sample: 115 Million Streams

Top Players

Apple appears to be the lone streaming service that is growing both in market share and revenue, and is paying relatively high royalties. It accounts for 22.29% of the revenue on 10.48% of the streams, and pays approximately six-times the per-stream royalty rate of Pandora. (Apple’s iTunes is a direct purchase model, while Pandora offers a more radio-like format, which precludes on demand listener selection.)

More than 95% of the streams and 98% of the revenue were concentrated in the top ten companies. The top three, Spotify, Apple iTunes and Pandora, comprise about 80% of the streams for this representative catalogue and 82% of the total streaming revenue.

For The Trichordist‘s 2017 streaming sample, go here; 2016, here; and 2013 here.

Image source: thetrichordist.com

 

IP “literacy” matters – Ideas Matter promotes IP understanding for all

A basic literacy about IP rights is everyone’s responsibility. 

While at times complex, patents, copyrights, and trademarks can be widely understood if people are clear about their purpose and who they benefit.

Putting IP rights in perspective is serious business – especially given that knowledge-focused economies place an increasingly high premium on innovation, authorship, and brand.

Ideas Matter, a London-based consortium of IP holders and innovative businesses believes it is necessary to provide audiences more information about why IP rights are important and how it affects people. Recently, it teamed with the Center for IP Understanding at the IP Awareness Summitt in Chicago, to produce a video about the need for everyone to know more about IP rights.

“I think the economies of the world have realized that the market is controlled by innovation and invention,” said Judge Randall Rader (ret.), Chief Judge of the Court of Appeals for the Federal Circuit. “That requires research, that requires development of new ideas and resources, and, of course, those investments need protection.  That’s where the intellectual property system pays benefits.”

Ideas Matter released a video of interviews with IP experts and holders conducted at the IP Awareness Summit in Chicago. IPAS 2017 was held by the Center for IP Awareness (CIPU) in conjunction with Chicago-Kent College of Law, Illinois Institute of Technology.

For background about the video and Ideas Matter, go here. Twitter: @IP_IdeasMatter.

To view the five-minute video, go here or click on the image above.

Image source: ideasmatter.com

IPCU readers get $200 off 10th IP Corporate Counsel Forum in NY

The 10th annual Corporate IP Counsel Forum will take place this year March 14-15 at the Sheraton Times Square in New York.

The keynote address will be delivered by Hon. Paul R. Michel, Chief Judge for the United States the Court of Appeals for the Federal Circuit, 2005-2010, ret; Circuit Judge, 1988-2010. Judge Michel is known as a strong advocate of improving the patent system and patent quality.

Judge Michel will address the controversies and issues surrounding the patent system, especially how to address patent enforcement quality in an era of greater IP uncertainty. The title of his talk is “Explore the Future of the AIA.”

Among other issues, Judge Michel will consider:

  • What must be learned from the past to make necessary adjustments in order to spur adequate private investment in R&D and commercialization, and to create new jobs and prosperity.

Leading IP Holders

Other Corporate IP Counsel Forum presenters and attendees include senior IP executives from JP Morgan Chase, General Electric Corporation, NCR Corporation, Royal Philips, Coty, Inc., Intel and Mastercard Woldwide, the Clearing House Payments Company (a global association of leading banks) and Wisconsin Alumni Research Foundation – WARF.

IP CloseUp readers who register by February receive a $200 discount on the conference fee. Use conference code IPC2XX.

For the program and full speaker list, go here

To register, go here

Image source: worldcongress.com

IP CloseUp visits up 26% in 2017; page views up 31%; readers drawn from 134 nations and territories

IP CloseUp, the blog of IP perspective, research, and people, grew in 2017 to more than 56,000 views and 44,000 visits, up 26% and 31% respectively from 2016.

Now in its seventh year, IPCU was read in 134 nations and territories in 2017. The top ten readers were the U.S., Canada, India, UK, New Zealand, Australia, Germany, South Korea, Taiwan, and France.  They were followed by the Netherlands, Japan, and China.

The most active month in 2017 was January, with 20,357 views. IPCU averaged a post a week and generated 52 posts for the year. Posts typically include links that make further research and exploration easier.

Since its inception in 2011, there have been more than 120,000 visits to IP CloseUp and 176,000 page views.

The most read post this year was about Robert Kearns, inventor of the intermittent windshield wiper, who was forced to sue U.S. and other automobile companies in the 1980s for patent infringement. The Kearns post generated 17,548 visits in January. A subsequent Kearns post published in 2016 can be found here.

IP CloseUp coverage includes patents, as well as copyrights, trademarks and trade secrets. Subscriptions are free. IPCU can also be followed on Twitter @ipcloseup.

Image source: http://www.ipcloseup.com

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