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I'm not a huge fan of the term "patent troll" which I agree can be unfairly negative, and without a clear definition often leads to problems. Recently, it seems that the term is most often applied to "non-practicing entities" making some people think that the patent system is mainly abused by those operations. That's a bit of misdirection. There's just as much, if not more, abuse of the patent system done by large companies. If there were actual proof (still waiting!) that the patent system actually did lead to more innovation, then I can easily understand why a non-practicing entity that just licensed its works could make sense. Unfortunately, most of the evidence suggests that patents don't actually lead to more innovation. In those cases, the only thing that non-practicing entities end up doing is hindering innovation.

However, Joe Mullin points us to a rather odd paper, suggesting that non-practicing entities are a good thing and should be called "patent elves" rather than "patent trolls." Part of what makes this paper so odd, is that one of the writers works for that law firm that recently advertised that it wouldn't work with patent trolls. Meanwhile, I guess it wants to let those "patent elves" in the back door.

As for the actual paper, it's really not all that different from earlier papers that try to present non-practicing entities as a boon to competition and innovation. They're all based on a few faulty assumptions, however. This latest one is basically a massive broken windows fallacy. That is, it basically states "if specialization is good, more specialization is better" in that it creates more economic activity. What it fails to do, however, is take into account how the market is distorted by that greater economic activity. Just as the broken window fallacy doesn't take into account the hidden costs of what kind of economic activity would take place in the absence of the broken window, this paper fails to take into account the innovation that occurs in the absence of the patent-holding non-practicing entity -- and simply assumes (falsely) that the patent holder is the key component in driving the innovation forward. Instead, it's much more likely that the patent holder represents the broken window -- a cost that detracts from more efficient economic activity, such as actually bringing a product to market where real innovation occurs.

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Back in May we wrote about how shoe store DSW was suing Zappos over potential trademark infringement done by an affiliate -- and now we've got another similar story. The company NameSafe is suing competitor LifeLock over Google ads that make use of NameSafe's name. While we've seen plenty of lawsuits where Google was incorrectly sued over ads based on competitor search terms, this case actually does seem a little more reasonable on those points: rather than suing Google, NameSafe is suing LifeLock, and NameSafe can probably make a half-decent case that the ads could be seen as confusing or deceptive.

However, where this case gets more interesting is on the question of whether LifeLock is to blame -- or if it's the fault of an affiliate marketer, as LifeLock claims. LifeLock says that it terminated the affiliate's account and also reminded all of its affiliates that this type of activity goes against their reseller agreements. That seems like a reasonable response, but for now the lawsuit against LifeLock continues, which will inevitably raise questions about whether or not a company is responsible for the actions of its affiliates and resellers. It seems like common sense to say no -- that the liability should remain with those who actually did the action -- but we've seen stranger decisions from courts before, so it may not be clear cut here.

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Back in May we wrote about how shoe store DSW was suing Zappos over potential trademark infringement done by an affiliate -- and now we've got another similar story. The company NameSafe is suing competitor LifeLock over Google ads that make use of NameSafe's name. While we've seen plenty of lawsuits where Google was incorrectly sued over ads based on competitor search terms, this case actually does seem a little more reasonable on those points: rather than suing Google, NameSafe is suing LifeLock, and NameSafe can probably make a half-decent case that the ads could be seen as confusing or deceptive.

However, where this case gets more interesting is on the question of whether LifeLock is to blame -- or if it's the fault of an affiliate marketer, as LifeLock claims. LifeLock says that it terminated the affiliate's account and also reminded all of its affiliates that this type of activity goes against their reseller agreements. That seems like a reasonable response, but for now the lawsuit against LifeLock continues, which will inevitably raise questions about whether or not a company is responsible for the actions of its affiliates and resellers. It seems like common sense to say no -- that the liability should remain with those who actually did the action -- but we've seen stranger decisions from courts before, so it may not be clear cut here.

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Apparently, EMI is finding it harder than expected to shackle its lawyers. The major record label was taken over by private equity guys who claimed they were going to take a new approach to the music industry, pointing to examples like Radiohead as the way to go. The company has made a few steps in the right direction -- such as threatening to leave the RIAA and the IFPI, as well as hiring some tech savvy talent. But, it just keeps sending out those lawyers filing all sorts of questionable lawsuits.

The latest is that EMI has sued both Hi5 and VideoEgg over user-uploaded videos that include some EMI music. Of course, under the DMCA, these sites are not responsible for any infringement from its users -- and if EMI has a legal beef with anyone, it would be those who uploaded the content. But, of course, it sues the companies who might actually have money. That "new approach" to the industry is looking an awful lot like the old approach. EMI is going to learn that the results are about the same too. Pissing off your fans and the websites that actually help promote your acts isn't going to go very far.

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There are all sorts of problems with copyright "collection" groups who are in charge of collecting royalties and distributing them out to content creators. However, at least in the US we have competition among a few different such collection agencies, with ASCAP and BMI being the big two, and SESAC being the new up and comer. However, over in Europe, they've set up monopolies with only a single collection agency in each country -- meaning that if the collection society has ridiculous artist-damaging ideas, you're stuck with them.

However, it looks like that may be about to change. A few people have sent in the news that Europe is looking to get rid of monopolies on copyright collection groups, meaning that there can be some competition among different groups to see who can serve an artist better. Of course, it's still not clear that these groups are needed at all -- as they mainly prop up an unnecessary and increasingly obsolete business model (compulsory licensing), but at least having some competition is better than none.

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With California's law banning driving while talking on a mobile phone without a handsfree device set to take effect next week, the author of the original bill is already working on a followup to ban driving-while-texting as well. He says this is necessary because driving-while-texting "wasn't an issue" when the original bill was put forth. Of course, there are an unlimited number of different driving distractions -- so if we really need to come up with a law for all of them, why don't we put our heads together to come up with a list. After all, we've already heard of worries that involve driving while using a laptop, driving while using OnStar, driving while faxing (which also includes something about driving while playing a video game). And, of course, everyone's favorite: driving while having sex.

Rather than coming up with all these laws banning each particular action, why not recognize that you can't ban stupidity, and just focus on already existing laws against reckless driving? If you're doing something other than driving that puts others at danger, that should be plenty. We shouldn't need a list of "banned" activities while driving. We should just be focused on teaching people to actually drive when they're driving.

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I'm always amazed at people who get pissed off at anyone who makes their products more valuable -- especially when they threaten to sue. Like the whole ridiculousness surrounding the Associated Press threatening a blogger for sending more attention its way, for example. The latest case is even more bizarre, as European discount airline easyJet is threatening to sue various travel websites that send it business. It's difficult to see how this could possibly make any business sense for easyJet.

Now, obviously, some will claim (as easyJet does) that easyJet should have the right to only sell flights off of its own website. But if these other sites are merely scraping the content and then linking back to easyJet, then what's the problem? These sites are sending more business to easyJet, and it wants to sue them. The lawyer quoted in the article discusses copyright issues (which again, seems to go against what the company should want) and also database rights -- which is recognized in Europe rather than the US. But even if it's true that easyJet has a legal right to block these sites, it still seems like a bad business idea to sue sites for giving you free advertising -- especially when those are the sites people go to when they want to buy airplane tickets.

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It's been shown over and over again that violent video games don't lead to violence -- but that hasn't stopped anti-video game crusaders from looking for any example that suggests otherwise. It appears they're having a field day with a bunch of stupid teenagers on Long Island who went on a rampage saying they were acting out scenes from Grand Theft Auto. The mistake here is to blame GTA for the acts. These kids were bored and decided to go on a rampage. If it wasn't copying GTA, it would have been for some other reason. Furthermore, just because the kids blame GTA, doesn't mean that GTA was responsible. Of course kids will blame GTA if they think that will get them out of jail: "It wasn't my fault, you see. I was under the influence of some video game..." It's an easy way to deflect blame, but doesn't mean that the blame shouldn't rest squarely on the shoulders of those kids, rather than the video game. Millions of people play GTA every day and have no intention of acting it out in real life.

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There's an interesting new article in the Harvard Business Review that looks to challenge Chris Anderson's well-known theory of "the long tail." In it, a Harvard professor, Anita Elberse, talks about how hits still make a lot of money, and the idea that all the money is now over in the long tail doesn't seem supported by reality. Chris himself makes some very good points in response, noting that some of this depends very much on where you "draw the line" between the hits and the tail. Since there's a sort of "fat middle," small changes in where you draw the line of what counts in which category can have a big impact. Chris makes a compelling argument that Elberse chose to draw the line in the wrong spot. He uses the inventory of various brick-and-mortar stores to determine where the line should be drawn, rather than at the somewhat arbitrary 10% and 1% lines that Elberse used.

However, I'd like to argue from a different angle as to why the HBR piece is missing the point. I don't think that anyone ever said that you completely ignore the hits. Perhaps it's a problem of the name "the long tail" but it starts to make people focus all the way at the end of the tail -- the part that is the least profitable. It's the point where only one copy of something is sold every so often. The companies that suddenly announced they were going to focus on the long tail seemed to think that you focus only on that tip at the end. That was not the point at all. You don't ignore the hits -- you just recognize that with infinite shelf space, you can now supply much more beyond the hits -- and that aggregate amount can add up to a substantial sum that no store with limited shelf-space can match. So, Elberse is completely correct in suggesting that companies don't just focus on the tail end of the tail -- but anyone who did so in the first place was misinterpreting the point of the long tail concept.

Even more to the point is that the concept of the long tail changes the shape of the market. When shelf space was limited, it made it that much more difficult to even get a creative work produced at all. You had to be able to convince someone that your work would make it into the "hits" category, and then get them to finance the creation of the work. And, anything that didn't actually become a hit fell off the chart completely. You basically had a bimodal distribution of content: the hits that sold, and the crap that didn't and was no longer available. But there was a hidden third category that most people didn't think of: the stuff that didn't get created at all because it wouldn't sell enough alone to justify it.

Yet, with the combination of cheaper tools for content creation, combined with cheaper distribution tools and infinite shelf space, that third "hidden" category started to exist in the open, where it was invisible before. And, on top of that, many of the works that fell into the "crap" end of the old model, could migrate into the long tail and make enough sales to be decent. But the point remains that it spread out the distribution, made it possible for much more content to both be created and sold -- and there are plenty of companies capitalizing on that. That doesn't mean that the hits go away or that the long tail concept doesn't make sense. It just means that you don't focus on the long tail by only focusing on the crap end of the long tail -- but on the entire distribution.

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The problem with the view that patents should be given out for every little improvement (most of which would have come about naturally thanks to market demand) is that you end up with "patent thickets" where a ton of different companies all claim patents on some small part of a larger offering. This isn't just an argument about "ownership" or "rights" in some cases. It can also have direct impact on keeping people alive.

For example, just witness the patent battle going on in the medical device market concerning Boston Scientific, Johnson & Johnson, Medtronic and... famed patent hoarder Acacia. Boston Scientific, Johnson & Johnson and Medtronic have all been suing each other concerning various patents used in stent and catheter technology. Acacia has now jumped into the fray by acquiring patents from Datascope and setting up yet another shell company called Cardio Access.

In all of these cases, everyone is claiming ownership over some piece of the technology used in stents and catheters, basically suggesting that others can't use that part of the technology without paying them. The end result is that we're all put at greater risk. Either stents and catheters won't be able to be as useful as they should be because they can't use the best possible technology -- or if they do use that technology, they get priced much higher to pay for all of these licenses from everyone else. And, of course, with all of these patent lawsuits (and rewards -- since Boston Scientific has already had to pay out the two largest patent fines this year, totaling $750 million), money that could have been spent on making a better product is instead going into lawsuits.

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