05.13.08
The Difference Between US Stance and EU Stance on Intellectual Monopolies
Active intervention versus passive acceptance of
intellectual monopoly abuse (and patent trolling)
It was only a few weeks ago that we last showed total indifference inside the United States government amid an evident patent problem. It’s becoming rather hopeless. The latest update seems to suggest that a proposed semi-solution hasn’t just been put on the ice, but almost discarded.
After years of heated debate and lobbying, the Patent Reform Act of 2007, which passed in the U.S. House of Representatives and was scheduled for a Senate vote this session, has been taken off the Senate’s calendar. It can be revived, but its momentum has effectively fizzled.
Apparently, the Senate has better things to do with its time.
Over in Europe came the recent appeal from Microsoft and the analysis from Digital Majority is worth noting.
Microsoft is appealing the decision of the European Commission over the 900M EUR fine. Microsoft is not happy about the patent licensing terms that the Commission has negotiated, and want to tax open source projects, such Samba and Redhat:
Microsoft argues that the licensing terms demanded by the EC violate its intellectual property rights.
Let’s bet that the Microsoft appeal to the ECJ is about patents. My nose is rarely wrong.
Digital Majority also has this good pointer to a new article from the Financial Times. It suggests that the economics of intellectual monopolies are inherently flawed. They are suicidal.
As multinationals become more skillful at managing their intellectual property, there are tax as well as commercial advantages. By holding brands and patents in low-tax countries and charging other subsidiaries for their use, profits are lowered in high-tax countries. Unsurprisingly, these shifts of intellectual capital are unpopular with many tax authorities. Two years ago, Mark Everson, former commissioner of the US Internal Revenue Service, warned that the increasing transfer of intangibles was a “high-risk compliance concern”, adding: “Taxpayers, especially in the high technology and pharmaceutical industries, are shifting profits offshore.”
The only way to shelter monopolies without destruction of the local economy is therefore to expand the bad laws in an imperialistic fashion, thus ensuring that everyone else suffers equally. To use an analogy from Richard Stallman (referring to patents), just because many people have heart attacks doesn’t mean it’s a good thing. █
“Are there some banks that have amassed giant arsenals—the Microsoft(s) of the banking world? (Microsoft had less than a dozen patents before the 1998 State Street decision, and now has thousands, according to a former IPLB reporter who was inside the Microsoft war room a year ago.)”
“Is there a giant settlement, or license agreement, or some other indicator of corporate behavior that would indicate why a particular financial company has a pro-BM patent standpoint? Who are the winners and losers of the first 10 years of biz-meth patent war?
–Why do any financial companies support business method patents?
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