Technology and I.P.

  • October 3, 2011
    Guest Post

    Editor’s Note: This is the first post in an ACSblog debate on antitrust scrutiny of Google between Harvard Business School Professor Benjamin G. Edelman and George Mason University School of Law Professor Joshua D. Wright. This online debate follows a recent U.S. Senate hearing on whether Google’s business practices “serve consumers” or “threaten competition.”

    By Benjamin G. Edelman, Assistant Professor, Harvard Business School

    The Senate Antitrust Subcommittee recently held a hearing to investigate persistent allegations of Google abusing its market power.  Witnesses Jeff Katz (CEO of Nextag) and Jeremy Stoppelman (CEO of Yelp) demonstrated Google giving its own services an advantage other sites cannot match.  For example, when a user searches for products for possible purchase, Google presents the user with Google Product Search links front-and-center, a premium placement no other product search service can obtain.  Furthermore, Google Product Search shows prices and images, where competitors get just text links.  Meanwhile, a user searching for restaurants, hotels, or other local merchants sees Google Places results with similar prominence, pushing other information services to locations users are unlikely to notice.  In antitrust parlance, this is tying: A user who wants only Google Search, but not Google’s other services, will be disappointed.  Instead, any user who wants Google Search is forced to receive Google’s other services too.  Google’s approach also forecloses competition: Other sites cannot compete on their merits for a substantial portion of the market – consumers who use Google to find information – because Google has kept those consumers for itself.

    But Google’s antitrust problems extend beyond tying Google’s ancillary services.  Consider advertisers buying placements from Google.  Google controls 75% of U.S. PC search traffic and more than 90% in many countries.  As a result, advertisers are compelled to accept whatever terms Google chooses to impose.  For example, an advertiser seeking placement through Google’s premium Search Network partners (like AOL and The New York Times) must also accept placement through the entire Google Search Network which includes all manner of typosquatting sites, adware, and pop-up ads, among other undesirable placements.  While these bogus ad placements defraud and overcharge advertisers, Google’s U.S. Advertising Program Terms offer remarkable defenses: these terms purport to let Google place ads “on any content or property provided by Google ... or ... provided by a third party upon which Google places ads” (clause 2.(y)-(z)) -- a circular “definition” that sounds more like a Dr. Seuss tale than an official contract.  Even Google's dispute resolution provisions are one-sided: An unsatisfied advertiser must complain to Google by “first class mail or air mail or overnight courier” with a copy by “confirmed facsimile.” (Despite my best efforts, I still don't know how a “confirmed” facsimile differs from a regular fax.)  Meanwhile, Google may send messages to an advertiser merely by “sending an email to the email address specified in [the advertiser's] account” (clause 9).  This hardly looks like a contract fairly negotiated among equals.  Quite the contrary, Google has all the power and is using it to the utmost.

  • July 25, 2011
    Guest Post

    By Eduardo M. Peñalver, Professor of Law, Cornell Law School

    If one definition of insanity is doing the same thing over and over while expecting a different result, then the “Protect IP Act” surely counts as confirmation (as if any were needed at this point) that our IP system and its beneficiaries have become genuinely unhinged.  The bill’s name is supposedly short for the “Preventing Real Online Threats to Economic Creativity and Theft of Intellectual Property Act of 2011,” but can anyone doubt that the sponsors came up with the acronym first and then brainstormed ways to generate it?  It is backed by the usual industry suspects, including the Motion Picture Association of America (MPAA), the Recording Industry Association of America (RIAA), and Viacom. 

    Protect IP attempts to provide new legal tools for going after websites located outside the United States who post infringing material.  Sponsored by (among others) Democratic Senator Patrick Leahy, it empowers federal courts to, in effect, “disappear” web sites that are “dedicated to infringing activities.”  Most significantly, the bill creates a procedure by which the Department of Justice can bring an action in federal court to request an order that, if granted, it can then use to compel domain name servers, search engines, and even (arguably) websites that link to the offending site, to delete references to the blacklisted site, apparently with the aim of making it impossible for users to reach the infringing content. 

    Much of the criticism of the proposed law has focused on the vagueness of its terms and the threat this may pose to First Amendment values.  What does it mean for a site to be “dedicated to infringing activities”?  Would the law, for example, make it possible for the U.S. government to block access to WikiLeaks by, among other things, punishing anyone who links to the site?  Commentators have also criticized the lack of procedural safeguards before a blacklist order may issue.  Although I agree with all of these concerns, I am more interested in the evidence the bill provides that a significant contingent of content providers (and therefore members of Congress eager to do their bidding) remain convinced that the solution to the problem of online piracy lies in reflexively ratcheting up the legal sanctions for infringement. 

  • June 14, 2011

    In the midst of new objections from some Republican members of Congress to a patent reform bill recently approved by the House Judiciary Committee, ACS has released a new Issue Brief on the measure at issue in the bill, “Short Term Pain for Long Term Gain: Why Congress Should Stop Diverting U.S. Patent and Trademark Office User Fees.”

    In the Issue Brief, American Continental Group, Inc. Partner Marla Page Grossman explains the importance of ending fee diversion, a practice in which funds paid by patent and trademark applicants are diverted to other programs and agencies “entirely unrelated to the [U.S. Patent and Trademark Office],” significantly slowing down the approval process and thwarting innovation.

    A provision to end fee diversion is contained in the America Invents Act, which was passed by the Senate and approved by the House Judiciary Committee with broad bipartisan support. But the provision encountered new opposition just last week, when House Appropriations Chairman Harold Rogers and House Budget Chairman Paul Ryan sent a letter to House Judiciary Chairman Lamar Smith opposing the fee diversion provision because it would hand “the Congressional power of the purse” to the Obama administration.

    In the days that followed, “[i]t was Republican leaders who fired back,” Grossman explains, with Rep. Lamar Smith responding that “contrary to putting the USPTO on auto-pilot, H.R. 1249 would actually promote accountability and transparency, creating more channels for oversight than currently exist,” and Sen. Tom Coburn asserting, “[w]e cannot have true patent reform without ending fee diversion and providing the PTO with a permanent, consistent source of funding” and that the “power of the purse does not provide Congress authority of non-taxpayer funds.”

    The Chamber of Commerce also expressed public support for the fee diversion provision this week, and more than 150 companies, schools and groups, including GE and Apple, submitted a letter reiterating the necessity of this provision.

    In her Issue Brief, Grossman explains the importance of encouraging innovation through the patent system to spur needed economic growth, demonstrates the inefficiency and unfairness that comes from diverting patent fees paid by users, and presents a number of ways in which the USPTO could maintain control of their own fees, the best of which “is incorporated in this Congress‘s patent reform bills.”

    She concludes:

    USPTO fee diversion must stop, and must be stopped now, to ensure that the USPTO can engage in the stable, long-term planning necessary for the issuance of timely, high-quality patents. The best legislative solutions will necessitate congressional appropriators prioritizing U.S. innovation, jobs and the economy over “inside the Beltway” politics. But good policies often come with painful politics. If Congress can handle a little pain in the short term, the nation will likely be rewarded with a more efficient USPTO and national prosperity over the long term.

    Read Grossman’s Issue Brief here and read a previous guest post by Grossman on this issue here.

  • June 3, 2011

    Venture Capitalist Fred Wilson at AVC citing Lodsys’ legal threats to independent developers says “software patents should not exit,” because they “are a tax on innovation.”

    Lodsys, a patent holding firm, has been threatening independent developers of apps for Apple using technology provided by Apple with lawsuits unless they purchase licenses for doing so from Lodsys. The patent firm has garnered some “significant negative feedback from the general public feedback regarding its actions,” according Darrell Etherington at Gigaom.

    Wilson, however, says the “mess around Lodsys patents should be a wake up call to everyone involved in the patent business (government bureaucrats, legislators, lawyers, investors, entrepreneurs, etc) that the system is totally broken and we can’t continue to on like this.”

    He continues:

    The whole point of these app ecosystems is that a ‘developer in a garage’ can get into business with these platforms. But these ‘developers in a garage’ can’t afford lawyers to represent themselves in a fight with a patent troll.

    Thinkprogress’s Matthew Yglesias brought Wilson’s “great little post,” to this blog’s attention, adding his own thought as to why this type of patent mess can occur.

  • April 26, 2011
    Video Interview

    Social media scholar danah boyd, a senior researcher at Microsoft Research and a research associate at Harvard University's Berkman Center for Internet and Society, recently spoke with ACSblog about young people, privacy, and the Internet.

    boyd explains why young people gravitate toward social media sites as a way of figuring out their place in the world, and why she believes the Children's Online Privacy Protection Act (COPPA), while well-intentioned, is not working the way it should.

    While COPPA was designed to require parent permission for children younger than 13 to participate in social media, the law has, in effect, created a ban for children younger than 13, with both parents and children systematically skirting that ban by lying about the child's age, she explains.

    “Parents are finding themselves written out of this and disempowered by the system, and they’re teaching their kids to lie,” boyd says.

    She suggests that education about use of social media is a better solution than age restrictions.

    Watch the full interview below.