IPcentral Weblog: November 2005 Archives

November 2005 Archives

(previous | next)

11.30.2005

iPod & Piracy

Today's free WSJ features "Apple's iPods Prosper as Piracy Flourishes, But Who Is to Blame?" by Nick Wingfield:

Apple says it has sold more than 600 million songs over the Internet, from zero just two-and-a-half years ago when the iTunes Music Store opened for business. But week-over-week growth of online song sales this year, including from the iTunes Music Store, has significantly slowed as iPod sales soared. In a research report last month, Richard Greenfield, an analyst at Fulcrum Global Partners, estimated the average annual song purchases per iPod online fell to 15 songs per iPod in the third quarter from 25 in the same quarter last year.

Continue reading iPod & Piracy . . .

posted by James DeLong @ 1:47 PM | Internet: P2P, Search Engines...

Link to this Entry | Printer-Friendly | Email a Comment | TrackBacks (0)| Post a Comment (0)

My New Year's Wish Is . . .

. . . for people to stop investing fantastic amounts of energy in scheming over how to get free rides on the Internet and start thinking about how to develop markets in the things they want.

Writing in New York, Adam Sternbergh identifies a fundamental fact about conventional television:

The prime economic directive of TV . . . has always been, TV doesn't sell shows to viewers: It sells viewers to advertisers. It is an interesting business model, one that came about by accident, and one that is now entirely obsolete.

Continue reading My New Year's Wish Is . . . . . .

posted by James DeLong @ 12:36 PM | Markets: Business, Investment & Innovation

Link to this Entry | Printer-Friendly | Email a Comment | TrackBacks (0)| Post a Comment (0)

Patents in Asia

From I/P Updates: A link to European Patent Office FAQs on patents in Japan, China, and Korea.

posted by James DeLong @ 8:06 AM | International

Link to this Entry | Printer-Friendly | Email a Comment | TrackBacks (0)| Post a Comment (0)

11.29.2005

More on Root Kits--Confusion!

I have been castigated by someone at blindmindseye for not taking the Sony DRM issue seriously enough. [Sorry, link not working... looks like the post might have been taken down? Will fix if possible] I am grateful, usually I have to pay extra for a good castigation.

The questions I intended to raise about the Sony DRM controversy were legal/policy, not technical. In particular, they were not intended to suggest that Sony's DRM was not malware. I am cheerfully content that it satisfies technical definitions of malware and that it does indeed create a vulnerability on consumers' computers. The question I intended to raise was how good our legal system is at addressing such a problem, as compared to the market (Sony's concern for its reputation, for losing business, etc.). Let me try again to point out some of the issues.

One question that comes up in considering possible legal responses is the question of intent. Now, as I understand the situation, Sony did not itself develop this particular bit of tech; rather, it was some little company in the UK. So here's one scenario that illustrates the problem I am getting at (I should stress that I have no inside knowledge of the process at Sony whatsoever, this is merely what seems like one plausible scenario to me):

After the debacle with the black pens, someone might well have been instructed to try again, and this time make a DRM that wasn't so easy to get rid of. Someone else thought he had a bright idea to take a page from the hacker tech manual. And so that product was delivered to Sony. It seems unlikely to me that there was a conversation along the lines of "you know that this is basically hacker tech that makes customers vulnerable to viruses and whatever, right?" Not impossible, but... implausible. So at this point it seems to me quite possible that this was a case of someone "should have been" more aware of security issues with the stuff. And so the line that one might draw between a bug and a deliberate attack can be more blurred than one would want. How many bugs "should have been" caught?

My larger point is, it isn't the technical characteristics of something alone that determine its legal treatment (whether or not we should think of it as an "attack"), it is partly the intent of the actors.

Set aside the intent issue for a second and look at the tech. Is it really always clear what is a "pure" hacker tool and what is not? Isn't it likely that in future programmers might well continue to experiment with "hacker tools" to see if they can use principles in those tools for a useful purpose? Isn't the argument that there is such a thing as a purely useless and bad tech usually made by advocates of tech bans? Are we saying that all software always has to be easily removable and detectable? By everyone? What about security software or content filters used by parents or schools or employers? Suppose experts could find and remove it but not beginners? Suppose a DRM system was hard to find or hard to remove, but didn't create a security vulnerability to outsiders? Or suppose it did, but was easy to find and remove? There are a million possible permutations of technology here--hard to imagine the legal system coming up with a top-down rule that makes sense for all of them, especially at this early stage of the game. Markets adapting after the fact are much more flexible.

I am cheerfully willing to concede that there is and ought to be such a thing as computer trespass. But in the case of a mistake that is being and can be fixed? On the basis of "should have known?" What then does one do about the Y2K bug, for instance? That necessarily or unecessarily cost a lot of companies a lot of money... and arguably was another case of "should have known..." Companies make tradeoffs in design all the time, knowing and unknowing...

And we then come to the issue of the harm. My point was *not* a technical one--I again cheerfully agree that the root kit did create a real vulnerability in user's computers. Just as if it had broken a lock on the front door, indeed (or maybe a side window, something less obvious). But if the lock is fixed and the vulnerability has never actually been exploited... surely the damages are different, that is, much less, than if it had been. Much, much less. And furthermore various parts of the legal system that have been set in motion in this case (class action suits, public prosecutions) rarely return anything of significance to actual consumers. Only to lawyers. The main impact on consumers is to raise prices or make a product less available.

Bottom line: No, I don't think the root kit should be regulated, in the usual sense of the word, as broadcasters or telecom companies are regulated. But then I don't think my critic meant that either. I do think that under some circumstances legal remedies would be appropriate for software that does damage. But in the meantime the legal system (to which market forces do not really apply) is more out of control than any DRM (to which market forces do apply). It is not clear to me what work is left for the legal system to do in this case.

posted by Solveig Singleton @ 3:18 PM | DRM & Watermarks, etc. , DRM & Watermarks, etc.

Link to this Entry | Printer-Friendly | Email a Comment | TrackBacks (0)| Post a Comment (0)

Times Change

In Ha Noi last week, a gentlemen introduced himself as a "VC." I did a doubletake, until I realized that in contemporary Vietnam the term VC means "Venture Capitalist," not "Viet Cong."

posted by James DeLong @ 12:54 PM | International

Link to this Entry | Printer-Friendly | Email a Comment | TrackBacks (0)| Post a Comment (0)

Fair Use Hearing

The witness statements are available from the Nov. 16 hearing on Fair Use: Its Effects on Consumers and Industry, in front of the Subcommittee on Commerce, Trade, and Consumer Protection of the House oommittee on Energy and Commerce.

posted by James DeLong @ 12:43 PM | Access: Commons, Fair Use, Orphan Works, Public Domain

Link to this Entry | Printer-Friendly | Email a Comment | TrackBacks (0)| Post a Comment (0)

Cable Pricing Deja Vu

The FCC is again talking about a la carte pricing for cable channels, so it is time to recycle Solveig's analysis of two years ago. The idea was bad then; it is bad now.

posted by James DeLong @ 12:16 PM |

Link to this Entry | Printer-Friendly | Email a Comment | TrackBacks (0)| Post a Comment (0)

11.28.2005

Supreme Court Will Hear Ebay Injunction Case

The Supreme Court will hear the case on whether the Federal Circuit correctly ruled that a finding of patent infringement automatically should result in the granting of a permanent injunction. Ebay has argued that this strengthens the incentives for the filing of patent suits, arguably problematic in the software sector because of the difficulty of avoiding patent infringement. This will heat up the legislative debate about whether to give judges the discretion to award damages instead of an injunction again. In effect, this would create compulsory licensing for all/any patents; it is hard to imagine how that would do more good than harm. Note to legislators: try loser pays instead?

posted by Solveig Singleton @ 11:48 AM | Patents

Link to this Entry | Printer-Friendly | Email a Comment | TrackBacks (0)| Post a Comment (0)

Are the Turkeys Gone Yet? Avian Flu PotPourri

From Peter Huber, a Forbes column, "Gouging the Drug Companies," November 24, 2005.

"Patent a miracle drug, choreograph the pricing just right and you recover your sunk costs efficiently, earn a good profit and move on to your next miracle. You can survive the arrival of me-too generic competitors: They put an end to your sunk-cost recovery only after the patent expires. Collectivized buying, however, imposes generic pricing from the get-go..."

From Tyler Cowan, a new paper on avian flu, including (from the executive summary) the radical idea that one "5. Respect intellectual property by buying the relevant drugs and vaccines at fair prices. Confiscating property rights would reduce the incentive for innovation the next time around."

From India, the news that generics will be permitted to make Tamiflu under license from Roche:

And from Promote the Progress, reports on the progress of negotiations with Roche.

And another cite, Jeanne Whalen, "Roche Says Three Asian Nations
Are Free to Manufacture Tamiflu," The Wall Street Journal, November 26, 2005, p. A4.

"Roche Holding AG, maker of the flu treatment Tamiflu, said it has told the governments of Thailand, the Philippines and Indonesia that they are free to manufacture the medication without paying compensation to Roche because the drug isn't patent-protected in the three countries."

posted by Solveig Singleton @ 11:18 AM | International , Patents , Pharma , Prices, Terms, and Licensing

Link to this Entry | Printer-Friendly | Email a Comment | TrackBacks (0)| Post a Comment (0)

Patent Injunctions - Cert Granted

The Supreme Court has granted certiorari in eBay v. MercExchange. The order says:

In addition to the Question presented by the petition, the parties are directed to brief and argue the following Question: "Whether this Court should reconsider its precedents, including Continental Paper Bag Co. v. Eastern Paper Bag Co., 210 U.S. 405 (1908), on when it is appropriate to grant an injunction against a patent infringer."

The question in the cert petition was:

Whether the Federal Circuit erred is setting forth a general rule in patent cases that a district court must, absent exceptional circumstances, issue a permanent injunction after a finding of infringement.

Patently-O has lots of links.

posted by James DeLong @ 11:08 AM | Patents

Link to this Entry | Printer-Friendly | Email a Comment | TrackBacks (0)| Post a Comment (0)

11.28.2005

Digital World

posted by James DeLong @ 9:00 AM | Infrastructure

Link to this Entry | Printer-Friendly | Email a Comment | TrackBacks (0)| Post a Comment (0)

11.23.2005

Amazon's One-Click Patent Again

posted by Solveig Singleton @ 11:02 AM | Patents , Software

Link to this Entry | Printer-Friendly | Email a Comment | TrackBacks (0)| Post a Comment (0)

11.22.2005