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Bank of America is granted (another) blockchain-type patent

Bank of America was granted last week a patent on a “cryptocurrency transformation system” that comprises a platform to manage exchange rates between various currencies, transfer requests, and customer accounts.

The timing could not be better. The price of a bitcoin as of December 12 is $17,756.96, up from $1,000 on January, and the premium on cryptocurrency and blockchain patents is sure to rise, too.

“Enterprises may handle a large number of financial transactions on a daily basis,” reported ETHnews, citing the bank’s patent. “As technology advances, financial transactions involving cryptocurrency have become more common. For some enterprises, it may be desirable to exchange currencies and cryptocurrencies.”

Blockchain-type Patents 

It is interesting to note that inventors from four different states are shown on the patent –  Georgia, Colorado, Florida and North Carolina, BofA’s home state. This may give some indication of the seriousness which it is taking the patent.

Top Assignees

According to an article in IP Watchdog, the four top assignees in the blockchain/cryptocurrency area are Bank of America, Mastercard, Paypal and CapitalOne, all financial entities. They followed by technology-based businesses IBM, Microsoft, Amazon and Apple.

Both groups appear to be pursuing leverage.

It is estimated that the Bank of America has filed more than 20 blockchain patents over the past four or five years. Its interest is unclear, but it may well simply want to prevent patent disputes by holding key patents.

For a copy of the new patent, issued on December 5, go here.

 

Image source: uponarriving.com; ipwatchdog.com

Copyright company filing is a “mini” IPO aimed at monetizing future music royalties

A business designed to acquire and monetize royalty streams “of the world’s biggest artists,” Royalty Flow, went public last week with a “mini” IPO, or registration under Regulation A+ crowdfunding initiative. 

A new type of PIPCO (public IP company), Royalty Flow hopes that under the 2012 JumpStart Our Business Start-up (JOBS) Act, passed by the Obama administration and known as “Regulation A+,” will enable it to raise between $11 million and $50 million. If successful, the capital will allow the company to purchase a portion of the income stream derived from Eminem’s 1999-2013 catalog and pay investors dividends in return.

Depending on how much money is raised, Royalty Flow will buy either 15 percent or 25 percent of an Eminem income stream based on royalties paid to FBT Productions, which often works with the performer.

With the recent upsurge in streaming revenues from services like Pandora, Spotify and Apple Music, some music industry observers believe that royalties generated under copyrights have a bright future. But streaming services have only just begun to pay recording artists and producers, and lucrative licensing deals reminiscent of returns on retail CDs are a long way off for most.  See “Music royalties – a siren song for niche investors seeking higher yield” in the August 23 IP CloseUp.

The Royalty Exchange website cites a Goldman Sachs analyst that paid streaming revenues will grow by 833% by 2030 (see graph above).

Reminiscent of “Bowie” Bonds

The Royalty Flow business model is reminiscent of the “Bowie” Bonds securitization that took place in 1997. In that arrangement Bowie’s company, the copyright holder, did not sell the assets, but a portion of the cash flow they generated over a ten-year term. Bowie did well on the $55 million deal. Investors, depending on when they bought and sold, did not.

“What Bowie sold was the present value of his personal intellectual property (song copyrights) – that is, the future expectation of future royalty income, less a discount,” said an analyst.

Those buying shares in Royalty Flow would have the right to collect dividends based on the performance of the Eminem catalog and any other catalogs acquired over time. The company says it intends to later list directly to the NASDAQ.

“The plan is to give fans and investors a way to share in the income from the royalties through dividends paid by the company,” reports Billboard.

The minimum investment during the IPO is $2,250 for 300 shares (at $7.50 a share). After the equity campaign is over, Royalty Flow “intends to list directly to NASDAQ and give latecomers a chance to invest in Royalty Flow stock through the public exchange.”

Royalty Flow was officially launched on November 27, 2017. The company, a subsidiary of Royalty Exchange, a copyright auction company. For more information about Royalty Flow, go here

For the Regulation A+ S.E.C. filing, go here.

Image source: royaltyflow.com

 

 

 

 

Antitrust Attorney General suing AT&T supports patent monetization

Yesterday, United States Assistant Attorney General for Antitrust Division, Makan Delrahim, filed suit to stop the $85 billion AT&T-Time Warner merger, which previously had been progressing through regulatory approval. 

Almost at the same time, in a recent carefully crafted speech before a business and law audience, he outlined his preference for reliable patents and consistent, free-market enforcement. Putting a patent attorney in charge of antitrust may be the Trump administration’s best idea yet.

Delrahim’s remarks were delivered recently as part of the USC Gould School of Law’s Center for Transnational Law and Business Conference.

“Fresh thinking about the implications of SSOs [standards setting organizations] and the proper role of antitrust law is long overdue,” said Delrahim, who is the first patent attorney to head the Antitrust Division. “Bargaining over new and innovative technologies is a high stakes game, and each side has an incentive to use every means necessary to improve its end of the bargain.  In this game, the competitive market process should win.”

Well-Crafted

The thoughtful speech was welcome relief to IP holders, especially non-practicing entities whose primary business is patent licensing. However, some people thought the timing and intent of the remarks were more difficult to discern.

“Clearly he [Delrahim] is sending a message that the AG’s office, and perhaps the Trump administration, knows the difference between IP exclusivity, which is conducive to innovation and businesses, and anti-competitive behavior,” a significant patent holder told IP CloseUp.

It’s ironic that his comments were made just days before the DOJ’s decision to sue to stop the AT&T-Time Warner merger, or maybe not.

Yesterday the Department of Justice sued to block the AT&T-Time Warner merger, citing its anticompetitive nature and ability of the combined company “to drive up the cost of channels like HBO, CNN and TBS to rivals and ultimately to consumers.”

Senate Committee on the Judiciary documents submitted in support of Delrahim’s confirmation, show that he has worked in the White House as an advisor and has had a distinguished private legal career, often supporting acquirers in large transactions.

Delrahim emigrated from Iran with his family in the 1970s when he was ten years old to escape the political strife. After law school, he joined Patton Boggs. In 1998, Delrahim became a counsel to the United States Senate Committee on the Judiciary, working under Senator Orrin Hatch (R-UT). Jon Leibowitz, who was then a Democratic Senate aide and worked with Delrahim, remembered him as being a pragmatist.

His video recorded confirmation hearing, worth looking at. Delrahim’s testimony occurs approximately 52 minutes into the recording.

Not a Vigilante

CNN, which may have to be sold to permit the AT&T-TWC merger to go through, reported that “A long time colleague of Delrahim’s who says he is a liberal told CNNMoney that he can’t imagine that Delrahim ‘would engage in any type of vigilante justice to help the president in the deal…That’s just unfathomable to me.'”

Delrahim IP background and more enlightened approach to patents in the marketplace could go a long way to repairing the legislative and judicial hits that the patent system that has taken over the past six years.

“We don’t have the tools to know what the competitive royalty rate is,” concluded Delrahim in his USC speech, “—we’re not price regulators, after all—and if we inject antitrust law where it does not belong. It can actually subvert the competitive process and do serious harm to American consumers and to innovation itself… It’s time to correct this asymmetry to ensure that there are maximum incentives to innovate, and equally proper incentives to implement.”

For the text of Delrahim’s remarks, go here.

Image source: bostonherald.com; fortune.com

Topsy turvy: InterDigital posts 66% drop in 3Q net; Acacia up $158.4M

Public IP company stalwart, InterDigital, with PIPCO-leading performance over the past five years, was hit by a significant drop in its net earnings in the 3Q. Its performance was in stark contrast to the oft-beleaguered Acacia, which posted a quarterly net profit of $158.4 million.

For Acacia Research Corporation (ACTG), the motivation was a one-time gain as a result of an unrealized return on its investment in Veritone Inc. (VERI), the artificial intelligence company that went public earlier this year.

InterDigital (IDCC) posted a 66% drop in 3Q net, as its income from patent royalties fell to $34.7M from $103.5M. “The decline in patent licensing was mainly because of a plunge in past patent royalties,” reported The Patent Investor.

Earning for PA-based IDCC actually came in better than expected. CEO Bill Merritt emphasized the company’s continued efforts to manage for the long-term, saying “the strong visibility over our revenues and future cash flows, given our high fixed-fee revenue contribution and long-term agreements, put us once again in a position to return value to shareholders with last month’s announcement of our third dividend increase in the past four years.”

Four Million Shares

Acacia’s $50 million in loans to Veritone converted in the AI firm’s May 2017 IPO into 4.12 million shares of Veritone. That included 1,969,186 shares and a warrant to acquire 2,150,335 shares that converted into stock with the IPO. Acacia also has 1,120,432 Veritone stock purchase warrants with a strike price of $13.26. The company said its cash and short-term investments totaled $158.6 million, as of September 30, 2017.

Acacia appears to have made generated a better return from its well-placed loan than it has from its recent patent licensing initiatives. That may be its smartest patent monetization play yet. InterDigital is down approximately $15 per share YTD; Acacia about $.50.

For a performance comparison of InterDigital, Acacia and other PIPCOs, visit the IP CloseUp 30™, here.

Image source: truebluetribune.com 

 

Update: 62 weird but strangely useful facts about bitcoin

$100 invested in bitcoin in July 2010 is worth about $6M today. For many, it is still unclear if blockchain is a viable alternative currency, an investment or a scheme that has made some people rich.

One Bitcoin today currently equals $7,416.88, up from under $500 over a year ago.

With those multiples you can see why patent and other IP holders are highly interested in the future not only of bitcoin, but other blockchain based crypto-currencies and transaction platforms. If bitcoin, which started it all, is far from perfect, blockchain, the technology that provides its basic infrastructure, can be seen as bitcoin 2.0.

The number of cryptocurrency and blockchain-related patent applications being submitted and published in the US has nearly doubled in 2017, reports Coin Desk.

Data from the US Patent and Trademark Office (USPTO) database indicates that there were 390 patent applications related broadly to blockchain technology published between January and July of this year.

“Overall, this represents a 90% increase compared to the same period in 2016, when 204 applications were sent to the USPTO,” said the publication.

The dataset includes combined keyword search results using terms such as “bitcoin,” “ethereum,” “blockchain” and “distributed ledger,” among others.

Bank of America has been among the most active filers. Three new submissions, initially filed with the USPTO early last year, add to a total of 20 blockchain and cryptocurre

ncy-related patent applications filed by the bank since 2014.

Diversity of Perspective

Not everyone agrees that bitcoin should be greeted with unbridled enthusiasm.

“Right now these crypto things are kind of a novelty,” JP Morgan CEO Jamie Dimon told a CNBC-TVreporter in New Delhi. “People think they’re kind of neat. But the bigger they get, the more governments are going to close them down…”

“It’s creating something out of nothing that to me is worth nothing,” he said. “It will end badly.”

Dimon was concerned that with bitcoin, ethereum and various initial coin offerings (ICOs), there are now cryptocurrencies everywhere. Several nations have even banned bitcoin.

Early Adopters

Despite Dimon’s comments, 69% of banks that participated in an Infosys survey reported that they were experimenting with permissioned or private blockchains, and some governments and an increasing number of companies, including Dell, Microsoft and Expedia accept bitcoin as payment.  The FBI, states the image below developed by a gambling site bitcoinplay.net the developed the image, owns 1.5% of all bitcoins.

Below is an infographic that updates an earlier IPCU post. It’s called “62 Insane Facts About Bitcoin.”

 

Image source: bitcoinplay.net; bitcoin.com

Patents’ early role in creating leading tech businesses eyed

Some information technology companies dubious about strong patents that can be used to restrict their activities or force them to pay licensing fees, appear to have benefitted from securing patents early in their life-cycle.

It’s doubtful whether their early patent success can be similarly reproduced today.

According to a post on the IPfolio blog, a diverse group of IT companies that drew early on patents includes Dropbox, FireEye, Zynga, Square, Facebook, Theranos, SolarCity, GoPro and Apple. 

“[Some] startups remain true to the original vision of the founders,” writes IPfolio. “By analyzing their first patent filings, it’s easy to see which ones have remained committed to plans likely first sketched on a whiteboard in a spare bedroom. In many cases, these ‘seminal patents’ closely describe what the company stands for today.”

“Here are the first patents granted to ten of Silicon Valley’s hottest companies. Fledgling startups when they first filed to protect their intellectual property, they’ve since created billion-dollar businesses around the seminal inventions.” For the full story, go here.

Apple: Microcomputer for use with video display (1977)

Decades before Apple expanded into mobile communication, music distribution and timepieces, it was synonymous with digital design. Steve Jobs’ less well-known co-founder Steve Wozniak invented a method for displaying color and high-resolution graphics using a standard cathode ray tube, which this April 1977 filing described. It was Apples’ first patent.

Google: Method for node ranking in a linked database (1998)

Above is Google’s famous PageRank patent, it’s first. Larry Page’s invention valued a webpage based on how many other pages linked to it. Filed in January 1998, the approach provided a significant improvement in the quality of search results, a key factor in Google’s rise as the dominant search engine. The original assignee was Stanford University, which received 1.8 million shares of Google stock in exchange for a long-term license.

Taken Seriously

For most of the ten tech high-fliers noted by IPfolio, strong patent protection helped them to be taken seriously. For others, like Theranos, the patents could not save a flawed business model and questionable leadership.

It is doubtful whether unicorns and other start-ups today can rely on patent protection to build their businesses in the way successful tech companies were able to in the recent past. There is too much uncertainty about what is patentable and what is a valid patent.

 

Image source: IPfolio.com

Global focus+ at IP Dealmakers Forum; IPCU reader’s save $200

Attendees to this year’s IP Dealmakers Forum can expect an expanded international perspective to the timely content and networking. This year’s keynote is Dr Lulin Gao, Founding Commissioner of the Chinese State IP Office. 

IPDF, now in its fourth year, emphasizes quality of content and attendees. Last year IPDF hosted more than 200 one-on-one private meetings.

“We are honored to have Dr. Gao as our keynote speaker this year,” noted Wendy Chou, Co-Founder of IP Dealmakers Forum.”He provides a timely and rare opportunity to gain insight into how China’s IP system really operates — straight from the source.“

Dr. Gao will present current data from the courts, providing attendees with valuable access to information that is not readily available.

Often referred to as the founding father of the modern Chinese IP system, Dr. Gao was the first Commissioner of China’s State IP Office, the longest standing Commissioner of the Chinese Patent Office, and a senior advisor to the WIPO. He is the recipient of numerous honors and awards for his contributions in IP.

Last year, almost two-thirds of IP Dealmakers Forum attendees were investors and significant IP owners. I attend IPDF regularly. The Apella event space at the Alexandria Center, over the East River in NY, just south of United Nations headquarters, is a unique and conducive environment for an IP transaction summit of this nature.

Program & Discount

For the IP Dealmakers Forum 2017 program and panelists, go here.

IP CloseUp readers to here to receive a $200 discount off the registration fee.

 

Image source: 

Financial Times article slams US patent syst for business model bias

An article that appeared last week in the Financial Times calling into question the effectiveness of a U.S.  patent system dangerously weakened by bad legislation and a false narrative about patent “trolls,” has won praise for its accuracy and honesty.

In a rare instance of serious business reporting on intellectual property rights, award-winning journalist, Rana Foroohar, slammed Silicon Valley companies that have endeavored to impede patent licensing and diminish innovation challenges from companies they cannot control.

“Indeed, the only ones that seem not to be complaining about the current system are a handful of the biggest Silicon Valley companies — including Google, Apple, Intel and Cisco.” While they all have their own patents to protect, their business models, which involve products that include hundreds or even thousands of bits of IP, tend to do better when there are fewer patents to deal with.

“But small and mid-sized software and hardware suppliers as well as life sciences companies have very different business models — ones that live or die on the ability to protect a handful of patents, and thus monetise their years of investment. For many of these companies, the shifts in the system that began a decade ago have gone too far.”

Several small and large patent holders told IP CloseUp that the FT deserves praise for finally getting the patent story right, one calling it a “breath of fresh air.”  Many believe that the business press has failed to report accurately about the patent system, and has served to blow the patent “troll” narrative way out of proportion, especially for those outside of the IP industry.

FT allows subscriber access to the Foroohar article, Big Tech vs Big Pharma: the battle over US patent protection,” here. [Oddly, the title does not reflect the depth of the piece. Perhaps a more explicit one may have been too much for some readers or editors?]

For a free version of the article that ran on CNBC, go here.

Tech Titans

Much of Ms. Forhooar’s recent reporting in the FT has dealt with the rise of what she calls tech titans, many of which are attempting to maintain their dominance by keeping the patent playing field uneven and potential competitors at bay.

She has served as correspondent and reporter for CNN and Time, and spent 13 years at Newsweek, as an economic and foreign affairs editor and a foreign correspondent covering Europe and the Middle East. For a list of her recent articles, go here.

Forhooar has won many awards for her reporting and has received several journalism fellowships. She is a life-member of the Council on Foreign Relations and has written a book, Makers and Takers: The Rise of Finance and the Fall of American Business.

“Big Tech vs. Pharma” sets a sorely needed benchmark for the business press for reporting accurately on the intellectual property. Covering the impact that changes in the patent system have wrought, and who are the real beneficiaries, is both a challenge and an opportunity.

Image source: twitter.com; lovespace.co.uk

Automakers and tech giants are locked in a strange patent race

At time when patent certainty and value are under attack, global automobile manufacturers are competing with major technology companies for IP rights to the future, especially driverless cars. 

The race is reminiscent of the competition between financial institutions, bigtech and fintech start-ups to control innovations in transactions, including those that relate to blockchain.

The automakers, like the banks, have traditionally cross-licensed each other in an effort to maintain patent peace and keep their franchise exclusive. It has yet to be determined if those participating in new technologies will wish to be similarly collaborative. Businesses like Google, Apple and Amazon certainly have the resources  and leverage to enforce inventions, if they choose to, or even buy a competitor.

The WSJ reports that a large part of filing in the auto industry has been with regard to self driving and connected cars, with 65% of GM’s filed patents in this area. Toyota, with more than 3,000 patents filed is by far the leader, but does not appear to figure into the self-driving patent race, choosing to focus on other areas of innovation, like efficiency (see graph below).

“Companies like Google, Facebook, and Apple, are pouring enormous resources into a vision of mobility that focuses on the driver experience,” writes Forbes“— so much so that they have the potential to take away some of the limelight — and profits — from the automakers many presumed would dominate car connectivity and driverless technology.”

Irony

There is some irony in the auto industry and financial patent races, since the Alice decision made software patents difficult to obtain and even harder to enforce. What are they thinking?

It remains to be seen how successful tech giants and disruptive banking and auto tech upstarts will be in competing with established players for innovation and rights – and if and how they will be able to deploy them. (With patents, sometimes leverage is more powerful than revenue.)

Two things are for certain: the source, ownership and importance of transportation inventions are changing; and the desire to secure meaningful patents that can be licensed will increase.

Image source: WIPO, Oliver Wyman; WSJ

Perception of patents & other IP rights is being taken more seriously

Do IP users – both businesses and individuals – view rights like patents and copyrights as potential assets that benefit commerce and society? Or, do they see them as nuisances to be ignored and, in some cases, disdained?

How IP rights are perceived, by whom, and why its starting to receive the critical attention it deserves.

Perception, which is known to affect value in all asset classes, is on the rise. Stakeholders are realizing that even sophisticated audiences are clueless about what IP rights generate, and for whom and that the growing hostility towards them has profound implications.

In the October IAM (out today), The Intangible Investor explores, “The premium on perception,” which highlights recent studies on IP perception. IAM readers can find a copy here.

Recent Studies

Several recent studies that look at how various audiences regard IP rights have set the stage for further research and analysis. They include:

European Citizens and Intellectual Property: Perception, Awareness and Behavior, a research report from the EUIPO, surveyed 26,000 EU citizens in 2013 and then again in a 2016 follow-up, published this year. Its findings show that while 97% of Europeans regard IP rights favorably, 41% of youths 15-24 believe that it is sometimes ok to buy counterfeits and many say they do, especially when cost is an issue.

Gregory N. Mandel, Dean of the Temple University Law School, questions the accuracy with which audiences see the IP system. In two seminal papers, he considers whether a system that is widely misunderstood can be effective. Professor Mandel and his team conducted research experiments with some 1,700 subjects. He has been researching IP and perception for over a decade with some startling results. The Public Perception of Intellectual Property was published in 2015, and What is IP for? Experiments in Lay and Expert Perceptions was this year.

The IP Strategy Report -2Q 2017 from Aistemos, and IP consultancy, edited by Professor Jeremy Phillips, provides additional useful data points regarding IP and perception. In a report published earlier this year that examined how patent disputes are covered by the technology, business and general media, the Center for Intellectual Property Understanding (CIPU) found that technology media are more subjective than other business or general press when it comes to reporting about patent infringement. The report, Patterns in Media Coverage of Patent Disputes, examined 127 articles published in 2016.

 Refusal to recognize the integrity of IP rights is growing. Whether or not this is simply a failure to communicate or a function of self-interest is unclear.

Perhaps the most compelling evidence about U.S. need for IP education was co-written by a Canadian researcher, Dan Breznitz.  What the US should be doing to protect Intellectual Property? appeared in the Harvard Business Review.

Failure to Communicate?

For some audiences, refusal to recognize the integrity of IP rights is growing. Whether or not this is simply a failure to communicate or a function of self-interest is unclear. What is clear is the need to quantify changes in attitude, what motivates them and their impact.

IP professionals have done an exceedingly poor job of explaining patents and other rights, to stakeholders, including their own boards of directors and investors. Perhaps they are fearful of setting the stage for future accountability, perhaps they think no one will care?

Recent attempts to track and understand attitudes toward IP are an important step in the right direction. More work needs to be done. An IP system which the participants do not understand or whose values they do not respect is no IP system at all.

Image source: euipo

 

 

Bitcoin prices dive: 58 bitcoin facts that will amuse and enlighten

It has been a decade since the appearance of bitcoin, the alternative or cryptocurrency based on a blockchain, a “decentralized” network or shared ledger that facilitates transparency. 

The currency’s pricing gyrations have been nothing short of a roller coaster ride, with bitcoins trading in 2017 as low as $750 and as high as $5,000.

Bitcoin is down from its September 2 high of $5,000 “on speculation,” reports Coindesk, “that the Chinese government is launching a crackdown on [bitcoin] exchanges.” Some others are blaming JP Morgan CEO Jamie Dimon’s scathing attack on bitcoin for the meltdown in the prices seen on September 13.

Business Insider says that as of last September 7 bitcoin is up 355% for 2017 (for the current price, go here).  More recently, it has hit a three-week low, and some believe it appears to be hurtling toward correction at around $3,000.

Hyped & Misunderstood

“No term at present is more hyped or misunderstood than blockchain,” reports FORTUNE. “A blockchain is a kind of ledger, a table that businesses use to track credits and debits… [It is] a definitive record of who owns what, when.“tp

“Properly applied, a blockchain can help assure data integrity, maintain auditable records, and even, in its latest iterations, render financial contracts into programmable software… Even if participants don’t trust one another, they can rely on the shared ledger through the transaction dance of their software.”

Goldman Sachs, Bank of America and MasterCard are among the most frequent recipients of blockchain patents. As reported in IP CloseUp, patent publications and grants are on the rise.

But despite price volatility, or perhaps because of it, bitcoin continues to attract converts. Among those who accept transactions with them are Microsoft, PayPal, Fortune magazine, Intuit, Amazon, Home Depot, Target and more than 100 companies.

Bitcoin is not blockchain, but the currency made possible by a blockchain platform or “shared ledger that underlies it. This is said to allow for transparency without any one party controlling clearing or profiting unfairly.

Bitcoin = Blockchain 1.0

Bitcoin is one manifestation of the blockchain ecosystem. It is an example of what a blockchain can do, but it is just the beginning. Blockchain 1.0, if you will. Industries as diverse as energy, healthcare and law are already using variations on blockchain technology.

The attraction of bitcoin is many-fold. Most important, it is highly private if not totally anonymous and eliminates the cost of middle-man and confusion from lack of transparency. 16.4 million bitcoins have been minted; after 21 million no new coins will be created. Once all coins have been mined value from the system, it has been said, will be derived from transaction fees (kind of like shares of stock).

For a bitcoin primer go here.

For those of you interested in the history of the bitcoin and early blockchain era, the following infographic – “10 Years of the World with Bitcoin – 58 Insane Facts” – from BitcoinPlay will enlighten as well as amuse. Source urls can be found at the bottom of the image.

 

Image source: bitcoinplay.net; bitcoin.com

 

U of Chicago-Booth Business School article is ‘junk’ IP science

An ill-founded attack on U.S. IP rights appearing yesterday in the University of Chicago, Booth School of Business publication, “Pro-Market,” is a sobering reminder that there those who believe that IP rights should be eliminated and are willing to resort to propaganda to make it happen. 

The article, “Intellectual Property Laws: Wolves in Sheep’s Clothing,” is a wakeup call to millions of Americans who believe in innovation, authorship and free-enterprise. It must be read to be believed.

Intellectual Property Laws: Wolves in Sheep’s Clothing by ink Lindsey and Steven M. Teles of the libertarian Niskanen Center, is a bold challenge to prove that IP has meaning in a digital world, and whether most rights can simply be ignored.

Authors Lindsey and Teles cite the much-debunked 2012 Bessen-Meurer research that claims $29 billion in costs to companies as a result of patent litigation.

“In other words,” state the authors, “outside the chemical and pharmaceutical industries, American public companies would apparently be better off if the patent system didn’t exist.”

The authors conclude: “The copyright and patent laws we have today therefore look more like intellectual monopoly than intellectual property. They do not simply give people their rightful due; on the contrary, they lavish special privileges on copyright and patent holders to the detriment of everyone else. Therefore, it is entirely appropriate to strip IP protection of its sheep’s clothing and to see it for the wolf it is, a major source of economic stagnation and a tool for unjust enrichment.”

The Niskanen Center, which Lindsey and Teles are associated, generated almost $2 million in 2015 revenues. The organization’s website does not indicate the sources nor does there their 990 annual statement.

Pro-Market is the blog of the Stigler Center at the University of Chicago Booth School of Business. The article is adapted from their upcoming book “The Captured Economy: How the Powerful Enrich Themselves, Slow Down Growth, and Increase Inequality” (Oxford University Press).

The article, “Intellectual Property Laws: Wolves in Sheep’s Clothing,” can be read here.

Image source: promarket.org

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