June 2, 2023

DRM for Chargers: Possibly Good for Users

Apple has filed a patent application on a technology for tethering rechargeable devices (like iPods) to particular chargers. The idea is that the device will only allow its batteries to be recharged if it is connected to an authorized charger.

Whether this is good for consumers depends on how a device comes to be authorized. If “authorized” just means “sold or licensed by Apple” then consumers won’t benefit – the only effect will be to give Apple control of the aftermarket for replacement chargers.

But if the iPod’s owner decides which chargers are authorized, then this might be a useful anti-theft measure – there’s little point in stealing an iPod if you won’t be able to recharge it.

How might this work? One possibility is that when the device is plugged in to a charger it hasn’t seen before, it makes a noise and prompts the user to enter a password on the iPod’s screen. If the correct password is entered, the device will allow itself to be recharged by that charger in the future. The device will become associated with a group of chargers over time.

Another possibility, mentioned in the patent, is that there could be a central registry of stolen iPods. When you synched your iPod with your computer, the computer would get a digitally signed statement from the registry, saying that your iPod was not listed as stolen. The computer would pass that signed statement on to the iPod. If the iPod went too long without seeing such a statement, it would demand that the user do a synch, or enter a password, before it would allow itself to be recharged.

How can we tell whether a DRM scheme like this is good for users. One sure-fire test is whether the user has the option of turning the scheme off. You don’t want a thief to be able to disable the scheme on a stolen iPod, but it’s safe to let the user disable the anti-theft feature the first time she syncs her new iPod, or later by entering a password.

We don’t know yet whether Apple will do this. But reading the patent, it looks to me like Apple has thought carefully about the legitimate anti-theft uses of this technology. That’s a good sign.

All the Interested Parties? Not Quite.

Here’s a quick quiz to detect whether you’re stuck in Washington groupthink.

There’s a patent reform bill under consideration in Congress. According to a blog entry by Andrew Noyes at the National Journal, a group of Republican senators sent a letter to Rep. Howard Berman, the chair of the relevant House subcommittee, asking that the patent bill be given more consideration before the committee votes on it. Senator Berman responded:

“There have been a number of hearings, briefings, and meetings about these issues over the past four years,” said Berman, who introduced a companion bill, H.R.1908. “We’ve heard from representatives of all the interested parties – from independent inventors, universities, bio-technology, pharmaceutical, software and financial services industries.”

Here’s the quiz: who did Rep. Berman leave off his list of “all the interested parties”?

Rep. Berman’s omission is a common one in Washington. Start listening for this omission, and you’ll be surprised how often you hear it.

I don’t mean to pick on Rep. Berman personally. Okay, maybe I do, just a tiny bit, given some of his past actions such as co-sponsoring the ill-advised Berman-Coble bill that would have legalized denial-of-service attacks against people suspected of sharing infringing content. If this was just one congressman, once, it wouldn’t be worth noting. But given the frequency of this mistake, I think it does reveal something about the standard Washington mindset.

In the case of patent reform, there are complex issues at stake. Changes to patent law can affect innovation and competition in subtle ways. That affects all of the parties Rep. Berman mentioned, as well as the one notable group he left out. Which is …

Ordinary citizens.

Princeton-Microsoft IP Conference Liveblog

Today I’m at the Princeton-Microsoft Intellectual Property Conference. I’ll be blogging some of the panels as they occur. There are parallel sessions, and I’m on one panel, so I can’t cover everything.

The first panel is on “Organizing the Public Interest”. Panelists are Yochai Benkler, David Einhorn, Margaret Hedstrom, Larry Lessig, and Gigi Sohn. The moderator is Paul Starr.

Yochai Benker (Yale Law) speaks first. He has two themes: decentralization of creation, and emergence of a political movement around that creation. Possibility of altering the politics in three ways. First, the changing relationship between creators and users and growth in the number of creators changes how people relate to the rules. Second, we see existence proofs of the possible success of decentralized production: Linux, Skype, Flickr, Wikipedia. Third, a shift away from centralized, mass, broadcast media. He talks about political movements like free culture, Internet freedom, etc. He says these movements are coalescing and allying with each other and with other powers such as companies or nations. He is skeptical of the direct value of public reason/persuasion. He thinks instead that changing social practices will have a bigger impact in the long run.

David Einhorn (Counsel for the Jackson Laboratory, a research institution) speaks second. “I’m here to talk about mice.” Jackson Lab has lots of laboratory mice – the largest collection (community? inventory?) in the world. Fights developed around access to certain strains of mice. Gene sequences created in the lab are patentable, and research institutions are allowed to exploit those patents (even if the university was government-funded). This has led to some problems. There is an inherent tension between patent exploitation and other goals of universities (creation and open dissemination of knowledge). Lines of lab mice were patentable, and suddenly lawyers were involved whenever researchers used to get mice. It sounds to me like Jackson Lab is a kind of creative commons for mice. He tells stories about how patent negotiations have blocked some nonprofit research efforts.

Margaret Hedstrom (Univ. of Michigan) speaks third. She talks about the impact of IP law on libraries and archives, and how those communities have organized themselves. In the digital world, there has been a shift from buying copies of materials, to licensing materials – a shift from the default copyright rules to the rules that are in the license. This means, for instance, that libraries may not be able to lend out material, or may not be able to make archival copies. Some special provisions in the law apply to libraries and archives, but not to everybody who does archiving (e.g., the Internet Archive is in the gray area). The orphan works problem is a big deal for libraries and archives, and they are working to chip away at this and other narrow legal issues. They are also talking to academic authors, urging them to be more careful about which rights they assign to journals who publish their articles.

Larry Lessig (Stanford Law) speaks fourth. He starts by saying that most of his problems are caused by his allies, but his opponents are nicer and more predictable in some ways. Why? (1) Need to unite technologists and lawyers. (2) Need to unite libertarians and liberals. Regarding tech and law, the main conflict is about what constitutes success. He says technologists want 99.99% success, lawyers are happy with 60%. (I don’t think this is quite right.) He says that fair use and network neutrality are essentially the same issue, but they’re handled inconsistently. He dislikes the fair use system (though he likes fair use itself) because the cost and uncertainty of the system bias so strongly against use without permission, even when those uses ought to be fair – people don’t want to be right, they want to avoid having suits filed against them. Net neutrality, he says, is essentially the same problem as fair use, because it is about how to limit the ability of properties owners who have monopoly power (i.e., copyright owners or ISPs) to use their monopoly property rights against the public interest. The challenge is how to keep the coalition together while addressing these issues.

Gigi Sohn (PublicKnowledge) is the last speaker. Her topic is “what it’s like to be a public interest advocate on the ground.” PublicKnowledge plays a key role in doing thiis, as part of a larger coalition. She lists six strategies that are used in practice to change the debate: (1) day to day, face to face advocacy with policymakers; (2) coalition-building with other NGOs, such as Consumers Union, librarians, etc., and especially industry (different sectors on different issues); (3) message-building, both push and pull communications; (4) grassroots organizing; (5) litigation, on offense and defense (with a shout-out to EFF); (6) working with scholars to build a theoretical framework on these topics. How has it worked? “We’ve been very good at stopping bad things”: broadcast flag, analog hole, database protection laws, etc. She says they/we haven’t been so successful at making good things happen.

Time for Q&A. Tobias Robison (“Precision Blogger”) asks Gigi how to get the financial clout needed to continue the fight. Gigi says it’s not so expensive to play defense.

Sandy Thatcher (head of Penn State University Press) asks how to reconcile the legitimate needs of copyright owners with their advocacy for narrower copyright. He suggests that university presses need the DMCA to survive. (I want to talk to him about that later!) Gigi says, as usual, that PK is interested in balance, not in abolishing the core of copyright. Margaret Hedstrom says that university presses are in a tough spot, and we don’t need to have as many university presses as we have. Yochai argues that university presses shouldn’t act just like commercial presses – if university presses are just like commercial presses why should universities and scholars have any special loyalty to them?

Anne-Marie Slaughter (Dean of the Woodrow Wilson Schoel at Princeton) suggests that some people will be willing to take less money in exchange for the pyschic satisfaction of helping people by spreading knowledge. She suggests that this is a way of showing leadership. Larry Lessig answers by arguing that many people, especially those with smaller market share, can benefit financially from allowing more access. Margaret Hedstrom gives another example of scholarly books released permissively, leading to more sales.

Wes Cohen from Duke Uhiversity asserts that IP rulings (like Madey v. Duke, which vastly narrowed the experimental use exception in patent law) have had relatively litle impact on the day-to-day practice of scientific research. He asks David Einhorn whether his matches his experience. David E. says that bench scientists “are going to do what they have always done” and people are basically ignoring these rules, just hoping that one research organization will sue another and that damages will be small anyway. But, he says, the law intrudes when one organization has to get research materials from another. He argues that this is a bad thing, especially when (as in most biotech research) both organizations are funded by the same government agency. Bill [didn’t catch the last name], who runs tech transfer for the University of California, says that there have been problems getting access to stem cell lines.

The second panel is on the effect of patent law. Panelists are Kathy Strandburg, Susan Mann, Wesley Cohen, Stephen Burley, and Mario Biagioli. Moderator is Rochelle Dreyfuss.

First speaker is Susan Mann (Director of IP Policy, or something like that) at Microsoft. She talks about the relation between patent law and the structure of the software industry. She says people tend not to realize how the contours of patent law shape how companies develop and design products. She gives a chronology of when and why patent law came to be applied to software. She argues that patents are better suited than copyright and trade secret for certain purposes, because patents are public, are only protected if novel and nonobvious, apply to methods of computation, and are more amenable to use in standards. She advocates process-oriented reforms to raise patent quality.

Stephen Burley (biotech researcher and entrepreneur) speaks second. He tells some stories about “me-too drugs”. Example: one of the competitors of Viagra differs from the Viagra molecule by only one carbon atom. Because of the way the viagra patent is written, the competitor could make their drug without licensing the Viagra patent. You might think this is pure free-riding, but in fact even these small differences have medical significance – in this case the drugs have the same primary effect but different side-effects. He tells another story where a new medical test cannot be independently validated by researchers because they can’t get a patent license. Here the patent is being used to prevent would-be customers from finding out about the quality of a product. (To a computer security researcher, this story sounds familiar.) He argues that the relatively free use of tools and materials in research has been hugely valuable.

Third speaker is Mario Biagioli (Harvard historian). He says that academic scientists have always been interested in patenting inventions, going back to Galileo, the Royal Society, Pascal, Huygens, and others. Galileo tried to patent the telescope. Early patents were given, not necessarily to inventors, but often to expert foreigners to give them an incentive to move. You might give a glassmaking patent to a Venetian glassmaker to give him an incentive to set up business in your city. Little explanation of how the invention worked was required, as long as the device or process produced the desired result. Novelty was not required. To get a patent, you didn’t need to invent something, you only needed to be the first to practice it in that particular place. The idea of specification – the requirement to describe the invention to the public in order to get a patent – was emphasized more recently.

Fourth speaker is Kathy Strandburg (DePaul Law). She emphasizes the social structure of science, which fosters incentives to create that are not accounted for in patent law. She argues that scientific creation is an inherently social process, with its own kind of economy of jobs and prestige. This process is pretty successful and we should be careful not to mess it up. She argues, too, that patent law doctrine hasn’t accounted adequately for innovation by users, and the tendency of users to share their innovations freely. She talks about researchers as users. When researchers are designing and using tools, they acting as both scientists and users, so both of the factors mentioned so far will operate, to make the incentive bigger than the standard story would predict. All of this argues for a robust research use exemption – a common position that seems to be emerging from several speakers so far.

Fifth and final speaker is Wesley Cohen (Duke economist). He presents his research on the impact of patents on the development and use of biotech research tools. There has been lots of concern about patenting and overly strict licensing of research tools by universities. His group did empirical research on this topic, in the biotech realm. Here are the findings. (1) Few scientists actually check whether patents might apply to them, even when their institutions tell them to check. (2) When scientists were aware of a patent they needed to license, licenses were almost always available at no cost. (3) Only rarely do scientists change their research direction because of concern over others’ patents. (4) Though patents have little impact, the need to get research materials is a bigger impediment (scientists couldn’t get a required input 20% of the time), and leads more often to changes in research direction because of inability to get materials. (5) When scientists withheld materials from their peers, the most common reasons were (a) research business activity related to the material, and (b) competition between scientists. His bottom-line conclusion: “law on the books is not the same as law in action”.

Now for the Q&A. Several questions to Wes Cohen about the details of his study results. Yochai Benkler asks, in light of the apparent practical irrelevance of patents in biotech research, what would happen if the patent system started applying strongly to that research. Wes Cohen answers that this is not so likely to happen, because there is a norm of reciprocity now, and there will still be a need to maintain good relations between different groups and institutions. It seems to me that he isn’t arguing that Benkler’s hypothetical woudn’t be harmful, just that the hypo is unlikely to happen. (Guy in the row behind me just fell asleep. I think the session is pretty interesting…)

After lunch, we have a speech by Sergio Sa Leitao, Brazil’s Minister of Cultural Policies. He speaks in favor of cultural diversity – “a read-only culture is not right for Brazil” – and how to reconcile it with IP. His theme is the need to face up to reality and figure out how to cope with changes brought on by technology. He talks specifically about the music industry, saying that they lots precious time trying to maintain a business model that was no longer relevant. He gives some history of IP diplomacy relating to cultural diversity, and argues for continued attention to this issue in international negotiations about IP policy. He speaks in favor of a UNESCO convention on cultural diversity.

In the last session of the day, I’ll be attending a panel on compulsory licensing. I’ll be on the panel, actually, so I won’t be liveblogging.

Princeton-Microsoft Intellectual Property Conference

Please join us for the 2006 Princeton University – Microsoft Intellectual Property Conference, Creativity & I.P. Law: How Intellectual Property Fosters or Hinders Creative Work, May 18-19 at Princeton University. This public conference will explore a number of strategies for dealing with IP issues facing creative workers in the fields of information technology, biotechnology, the arts, and archiving/humanities.

The conference is co-sponsored by the Center for Arts and Cultural Policy Studies, the Program in Law and Public Affairs, and the Center for Information Technology Policy at the Woodrow Wilson School of Public and International Affairs and funded by the Microsoft Corporation, with additional support from the Rockefeller Foundation.

The conference features keynote addresses from Lawrence Lessig, Professor of Law at Stanford Law School, and Raymond Gilmartin, former CEO of Merck, Inc. A plenary address will be delivered by Sérgio Sá Leitão, Secretary for Cultural Policies at the Ministry of Culture, Brazil.

Six panels, bringing together experts from various disciplines and sectors, will examine the following topics:

  • Organizing the public interest
  • The construction of authorship
  • Patents and creativity
  • Tacit knowledge and the pragmatics of creative work: can IP law keep up?
  • Compulsory licensing: a solution to multiple-rights-induced gridlock?
  • New models of innovation: blurring boundaries and balancing conflicting norms

We expect the conference to generate a number of significant research initiatives designed to collect and analyze empirical data on the relationship between intellectual property regimes and the practices of creative workers.

Registration for the conference is strongly encouraged as space is limited for some events. For additional information and to register, please visit the conference web site. Online registration will be available beginning Friday, April 14.

We hope to see you in May.

Stanley N. Katz, Director, Center for Arts and Cultural Policy Studies
Paul J. DiMaggio, Research Director, Center for Arts and Cultural Policy Studies
Edward W. Felten, Director, Center for Information Technology Policy

Intellectual Property, Innovation, and Decision Architectures

Tim Wu has an interesting new draft paper on how public policy in areas like intellectual property affects which innovations are pursued. It’s often hard to tell in advance which innovations will succeed. Organizational economists distinguish centralized decision structures, in which one party decides whether to proceed with a proposed innovation, from decentralized structures, in which any one of several parties can decide to proceed.

This distinction gives us a new perspective on when intellectual property rights should be assigned, and what their optimal scope is. In general, economists favor decentralized decision structures in economic systems, based on the observation that free market economies perform better than planned centralized economies. This suggests – even accepting the useful incentives created by intellectual property – at least one reason to be cautious about the assignment of broad rights. The danger is that centralization of investment decision-making may block the best or most innovative ideas from coming to market. This concern must be weighed against the desirable ex ante incentives created by an intellectual property grant.

This is an interesting observation that opens up a whole series of questions, which Wu discusses briefly. I can’t do his discussion justice here, so I’ll just extract two issue he raises.

The first issue is whether the problems with centralized management can be overcome by licensing. Suppose Alice owns a patent that is needed to build useful widgets. Alice has centralized control over any widget innovation, and she might make bad decisions about which innovations to invest in. Suppose Bob believes that quabbling widgets will be a big hit, but Alice doesn’t like them and decides not to invest in them. If Bob can pay Alice for the right to build quabbling widgets, then perhaps Bob’s good sense (in this case) can overcome Alice’s doubts. Alice is happy to take Bob’s money in exchange for letting him sell a product that she thinks will fail; and quabbling widgets get built. If the story works out this way, then the centralization of decisionmaking by Alice isn’t much of a problem, because anyone who has a better idea (or thinks they do) can just cut a deal with Alice.

But exclusive rights won’t always be licensed efficiently. The economic literature considers the conditions under which efficient licensing will occur. Suffice it to say that this is a complicated question, and that one should not simply assume that efficient licensing is a given. Disruptive technologies are especially likely to go unlicensed.

Wu also discusses, based on his analysis, which kinds of industries are the best candidates for strong grants of exclusive rights.

An intellectual property regime is most clearly desirable for mature industries, by definition technologically stable, and with low or negative economic growth…. [I]f by definition profit margins are thin in a declining industry, it will be better to have only the very best projects come to market…. By the same logic, the case for strong intellectual property protections may be at its weakest in new industries, which can be described as industries that are expanding rapidly and where technologies are changing quickly…. A [decentralized] decision structure may be necessary to uncover the innovative ideas that are the most valuable, at the costs of multiple failures.

As they say in the blogosphere, read the whole thing.