Several scholars have released research on calculating damages in patent suites- Jerry Hausman, Gregory Leonard, J. Gregory Sidak, Patent Damages and Real Options: How Judicial Characterization of Non-Infringing Alternatives Reduces Incentives to Innovate, Berkeley Technology Law Journal, Vol. 22, Fall 2007.

The context-

The legal framework under which patent damages are calculated changed substantially after the Federal Circuit decided Grain Processing Corp. v. American Maize-Products Co. in 1999. Perhaps the most important question in the typical lost profits analysis is determining the fraction of the infringing sales that constitute lost sales to the patent holder. The answer to this question usually depends on the set of non-infringing substitute products to which the customers of the infringing product could have turned in the but-for world where the infringing product was not available to them.

Before Grain Processing... case law ...generally restricted the set of non-infringing substitute products to include only products that were actually sold in the marketplace. ...Grain Processing eased this restriction on the set of non-infringing substitutes available in the but-for world by allowing an infringer to claim that it would have offered a non-infringing product that, although not actually sold in the marketplace, was technically feasible at the time and could have been made commercially available relatively quickly. ..

Continue reading Calculating Patent Damages . . .

posted by Noel Le @ 2:29 PM |

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Some recent commentary on the patent reform legislation.

From Matt Buchanan's Promote the Progress; cheaper iPods, fewer cures?

Robert Armitage on how the courts have beaten Congress to the punch.

And a quote from Robert Cresanti, now with Ocean Tomo:

"[Ocean Tomo] will still proceed with the exchange (even if pending Congressional reforms pass), but many patents may be devalued.", he warned. "Our hope is the Senate will come around to the same conclusion we have - that there is no pressing need for reform in light of what the courts and USPTO have done.", he added.

posted by Solveig Singleton @ 8:44 AM | Legislation and Legislators , Patents

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http://music-tech-policy.blogspot.com/2007/10/comcast-gets-it-right-why-you-hate-net.html

posted by Solveig Singleton @ 11:58 AM | Internet: P2P, Search Engines...

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This Financial Times article describes how users are transforming innovation. Interesting. More alarming is Alec Van Gelder's comment that this will be widely misunderstood:

Unfortunately, I predict policy makers will take out all the good aspects of this - removing subsidies, ceasing to support national champions - and employ all of the bad ones, namely to decrease intellectual property protection. Clearly the authors fail to understand that open source business models are actually a result of a strong intellectual property platform, empowering rights-holders with the ability to determine for themselves how to exploit their property.

There is another aspect of the problem, too. Sometimes, users' interests run contrary to the interests of other groups of users, or of all users' interests in the long run. Suppose a producer figures out how to best provide a service, benefiting all users' by coming up with a mechanism to mostly exclude free riders. A determined group of free riders will supply demand for some third party to intrude upon the beneficial arrangement. Ordinarily, the original producer will respond in kind and restore the economic basis for production. But in some environments, or if the power of the free riders is political, that becomes very hard.

posted by Solveig Singleton @ 11:45 AM | Markets: Business, Investment & Innovation

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A new paper on the relationship between patents, R&D and innovation- Denicolò, Vincenzo, Do Patents Over-Compensate Innovators? Economic Policy, Vol. 22, No. 52, pp. 679-729, October 2007.

Is the current level of patent protection too high or too low? To address this issue, this paper reformulates the theoretical analysis of the optimal level of patent protection to take into account the empirical findings of the innovation production function literature. This literature finds a strong relationship between R&D spending and inventions... The paper then assesses the current level of patent protection, exploiting estimates of the private and social returns to R&D taken from the empirical literature and other available sources. Although more research is needed for a more precise assessment, the evidence available suggests that patents do not over-compensate innovators.

posted by Noel Le @ 12:09 PM | Academia , Patents

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Several scholars have released a paper on property and liability rules in patent infringement cases- Denicolò, Vincenzo, Geradin, Damien, Layne-Farrar, Anne and Padilla, A. Jorge, "Revisiting Injunctive Relief in High-Tech Industries with Non-Practicing Patent Holders (September 2007).

Injunctive relief is at the center of the intellectual property debate over market power abuse. Some scholars, with fears of patent holdup and royalty stacking in mind, have advocated limiting the right to obtain an injunction. In particular, some have called for categorical denials of injunctions for any “non-practicing” patent holder or whenever the patent in question is but one component of a larger, complex product incorporating multiple patented technologies.

...we examine the injunctive relief policy proposals using an error cost framework. We find the theory these proposals rest upon to be overly restrictive and therefore likely to result in substantial “false positives”, where patent holders with no designs of patent holdup are nonetheless denied injunctive relief. Moreover, the available empirical evidence does not support the position that patent holdup and royalty stacking are pervasive enough problems to warrant significant policy reform.

...we argue that the recent Supreme Court eBay decision can and should be read as a return to a balancing test, where costs and benefits are weighed carefully before granting or denying a patent injunction.

posted by Noel Le @ 11:58 AM | Academia , Patents

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Some of the most interesting challenges for digital-age copyright policy arise from the growing popularity of user-generated content (UGC). UGC offers exciting new possibilities for people to create or interact with their favorite works, but it raises thorny problems that range from its potential to facilitate infringement to questions about reconciling the creative potential of UGC with other creators’ interests in the artistic integrity of their works.

Fortunately, one advantage of letting enforceable property rights generate markets for socially valuable goods and services is that markets require participants to find “win-win” solutions: In a market, a given transaction should occur only if all parties to it are better off as a result. Markets thus create potent incentives to reconcile divergent interests.

The solution-generating power of markets was evident today when a diverse coalition of technology and media companies released Copyright Principles for UGC Services. The Principles attempt to define a win-win-win solution: A set of ground rules that will promote respect for copyrights, the production of UGC, and the development of innovative platforms for promoting and distributing it. Key provisions of the Principles include the following:

1) UGC sites should use “highly effective” filtering technologies, or human review, to identify and remove infringing content before it is uploaded and enhance or update those technologies as significant advances become commercially available.

2) Copyright holders and UGC sites should cooperate to ensure that filtering systems effectively balance legitimate interests in blocking infringing uploads, allowing original or authorized uploads, and accommodating fair use.

3) Copyright holders and UGC sites should develop procedures to promptly address conflicting claims of ownership, and user’s claims that filtered content was not infringing.

4) Copyright holders should neither file infringement claims against UGC sites that adhere in good faith to the Principles nor assert that adherence to the Principles disqualifies a UGC site from claiming the benefits of safe-harbor protections like those in the DMCA.

At their core, the Principles seek cooperative solutions to the possibilities and challenges posed by UGC. For that, they should be applauded. When property rights are unclear, or not respected, we often resort to non-market-based dispute-resolution mechanisms—like litigation. But litigation does not promote win-win outcomes and may leave all parties worse off. Companies like Disney, Microsoft, NBC-Universal, MySpace, Daily Motion, CBS, Viacom, and Fox deserve great credit for this effort to identify solutions that balance their interests with those of creative consumers. Bravo.

posted by Thomas Sydnor @ 5:46 PM | DMCA , Enforcement & Remedies , Internet: P2P, Search Engines... , Markets: Business, Investment & Innovation , Prices, Terms, and Licensing , Standards

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Coverage from CNET, Google Unveils YouTube Antipiracy Tool. (including comments from Bob Tur, plaintiff in another suit against YouTube).

And from ZDNET, a blog entry, "Google's YouTube Copyright Tool: Potential Annoyance, Viacom Settlement Fodder."

And Chris Castle's pointed remarks.

Meanwhile, the courts work out how strong filtering needs to be, once liability is established.

posted by Solveig Singleton @ 3:54 PM | DRM & Watermarks, etc. , Internet: P2P, Search Engines...

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An insightful article by Andy Greenberg of Forbes on Radiohead's "pay what you want" experiment.

Free? Steal it Anyway

The article quotes Doug Litchtman, one of IPcentral's Academic Advisory Council members:

"But for Doug Lichtman, an intellectual property professor at the UCLA School of Law, the volume of piracy following In Rainbows' release erodes the success of Radiohead's innovation. "If the community rejects even forward-thinking experiments like this one, real harm is done to the next generation of experimentation and change," he says."

posted by Amy Smorodin @ 2:53 PM | Internet: P2P, Search Engines... , Markets: Business, Investment & Innovation , Media: Video, Music...

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In a letter released today, Chairmax Waxman, Ranking Member Davis, and 18 other members of the House Committee on Oversight and Government Reform called for the FTC to investigate the recurring problem of inadvertent filesharing.

As someone who has personally investigated this problem, I suspect that when the FTC does investigate, it will be justly outraged. In fact, I suspect that the FTC will discover that during its 2004 investigation of this issue, distributors' misrepresentations and material ommissions led the FTC to perpetuate--or even exacerbate--the very threat to consumers that it intended to remediate.

In short, I suspect that we will learn that when researchers and Congress identify particular features in filesharing programs as causes of inadvertent sharing, it is a really bad idea for corporations distributing those programs to concoct a self-regulatory Code of Conduct to prevent inadvertent sharing, violate it routinely by deploying equally (or more) aggressive versions of features previously shown to cause inadvertent sharing, and then represent to the Federal Trade Commission that their adherence to their Code had made inadvertent sharing a mere "urban myth."

The letter to the FTC should also lead state attorneys general to renew their investigations of inadvertent sharing. In 2004, at about the same time as the FTC, the National Association of Attorneys General (NAAG) raised its concerns about inadvertent sharing with distributors of filesharing programs. While I have never been able to review the representations that were made to NAAG, it would not be surprising to discover that they were as problematic as some of those made to the FTC.

posted by Thomas Sydnor @ 2:26 PM | Enforcement & Remedies , Free Culture Movement , Internet: P2P, Search Engines... , Privacy and Security

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posted by Thomas Sydnor @ 11:50 AM | DMCA , Enforcement & Remedies , Free Culture Movement , Internet: P2P, Search Engines...

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posted by Noel Le @ 3:55 PM | Free Culture Movement

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posted by Noel Le @ 7:04 PM | Academia , Enforcement & Remedies

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posted by Solveig Singleton @ 2:06 PM | Enforcement & Remedies

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posted by Solveig Singleton @ 12:27 PM | Media: Video, Music...

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posted by Thomas Sydnor @ 9:56 AM | Enforcement & Remedies , Free Culture Movement , Internet: P2P, Search Engines...

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posted by Noel Le @ 5:47 PM | Enforcement & Remedies

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posted by Noel Le @ 1:35 PM | Free Culture Movement

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posted by Noel Le @ 1:25 PM | Free Culture Movement

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posted by Noel Le @ 1:16 PM | Academia , Patents

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posted by Noel Le @ 1:37 PM | General

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