The weekly newsletter for Fed2 by ibgames

EARTHDATE: May 13, 2007

Official News - page 12


WINDING DOWN

An idiosyncratic look at, and comment on, the week's net and technology news
by Alan Lenton

I mentioned last week that the US Supreme Court had handed down a couple of very important decisions relating to so called 'intellectual' property. Now that the dust has settled a bit, I thought I'd have a look at the implications.

I also drew attention to the e-gold case, but that seems to have gone quiet, so I've added the URLs for the original report and e-gold's riposte to the scanner section. I may cover it in more depth once additional information becomes available.

Also, last week, I reported that Microsoft wasn't fixing a hole in its DNS server. Actually, it was - so I withdraw the sarcastic remark I made. Hurrumph...

Anyway, on with the main course while I go and figure out how to make cheese on toast in a conventional toaster...


Patents: Common sense makes a bid for freedom

The Supreme Court recently handed down two decisions concerning the scope of copyright infringement liability, and the meaning of the word 'obvious' when courts determine whether a patent is valid or not.

The first case concerned a patent infringement by Microsoft. In 2001 AT&T sued Microsoft for infringement of a patent it held relating to the compression and encoding of recorded speech. Microsoft admitted liability and duly settled with AT&T, but then AT&T upped the stakes by claiming that the agreement was breached when Microsoft sent the master disk for Windows abroad for mass production.

At the heart of the dispute is the question of whether the master copy was a 'part', in which case Microsoft would be deemed to be breaking the agreement, or a 'blueprint', which is legal. There's a lot of money riding on the answer. The US market may be big, but the world market is far bigger. So, should Microsoft (and by extension a lot more tech companies) be paying up for global sales or just for the US sales?

AT&T won the first two rounds in the district court and in the Court of Appeals. Round three was the Supremes. Fortunately for Microsoft and the tech industry, the Supreme Court came down 7-1 in Microsoft's favour. No doubt there were a lot of celebrations on the night of the decision, even though it is the only sensible one to make. The alternative would have been to imply that the US patent system applies globally, overruling any local, sovereign legislation - something very difficult to justify or enforce.

The AT&T v Microsoft decision was in many ways the less important of the two decisions, since it really only affirmed the original status quo. Far more significant was the second decision which changed the rules for invalidating patents in the court.

What the high court did was to redefine the test for whether a patented innovation is obvious or not. In the former case it is patentable, in the latter it isn't. The case itself involved a patent for an adjustable accelerator pedal for motorists, which the Justices tossed out as being 'obvious'.

In itself that wasn't much (except to the litigants), but the Justices then went on to redefine 'obvious' in a way which definitely weakened the strength of patent holders. As Justice Anthony Kennedy explained, 'Granting patent protection to advances that would occur in the ordinary course without real innovation retards progress and may... deprive prior inventions of their value.'

Previously, courts had used the test for obvious in a way that made it start from whether an invention was obvious to someone coming in and looking at the process cold, rather than whether it was an obvious step forward to anyone working in the trade. The latter interpretation is much 'looser' than the former.

This ruling will obviously have effects right across the board, including in the tech industry. The people who are likely to suffer most, however, are the pharmaceutical industry. For some time now they have been 'extending' their patents' life by recombining drugs that are about to stop being protected by patents, and then patenting the combination. (Hint: think, for instance, of combining a painkiller with a muscle relaxant and patenting the combination.)

The pharmaceutical industry have always had a lot of patent protection. The rationale for this is that it takes an enormous amount of work to discover and test possible new drugs, and even then most potential new drugs don't make it past the safety tests.

This is true, but that doesn't take any account of the effects of modern computing power. Much of the preliminary work is now done by designing and testing molecules on a computer workstation. Work that used to take man years now takes only man days, and much of it can be automated.

OK, proper testing is still expense, though many companies are cutting costs by 'offshoring' testing to third world areas where, how shall I put it, governments have less stringent views about their citizen's welfare...

The fall out from the decisions has been immediate. Vonage, which recently lost an important patent case brought against it by Verizon asked for a retrial under the new rules. The retrial was refused, but Vonage is being allowed to introduce the Supreme Court's new ruling at an appeal in the not too distant future.

In other patent news, Brazil has just effectively stripped Merck of patent protection on the AIDS drug efavirenz, so that it can produce a generic version and thus afford to treat its AIDS sufferers. No doubt there will be much screaming and rending of garments in high places in the pharmaceutical industry.

And half way around the world the Indian government has set up a task force to create a database of yoga techniques. Why? Because the US Patent Office has already granted 150 yoga related copyrights and 2,315 yoga trademarks. The Indians are not happy, to say the least, about other people trying to turn a fast buck out of several thousand years of Indian culture. I hope the Indian government succeed in stopping this abuse!

http://www.theregister.co.uk/2007/04/30/supreme_court_favors_microsoft_over_att/
http://newsletter.infoworld.com/t?ctl=174A5D6:
215D3E184FC552DCBD40B9B9BABE4BC9EFF29049075316B4

http://www.theregister.co.uk/2007/05/04/vonage_denied_retrial/
http://www.csrstds.com/IECChallenge2006.pdf
http://www.physorg.com/news97643171.html
http://www.theregister.co.uk/2007/05/09/yoga_patents/
http://www.huffingtonpost.com/james-love/brazil-puts-patients-befo_b_47651.html
http://www.theregister.co.uk/2007/05/02/vonage_seeks_verizon_patent_re-trial/


Shorts:

If HP thought their 'pretexting' (stupid name, that) past was going to be forgotten any time soon, this week's events must have been a wake up call. Those of you following the case may recall that not only did HP spy on its own employees and directors, it also spied on journalists. Now three of the journalists who were spied on, Dawn Kawamoto, Tom Krazit and Stephen Shankland are suing the company for the invasion of their privacy.

Reporters affected have been negotiating with HP for some time, but a vast gulf remains with the reporters demanding several million each (most of which would have been donated to charity) and the company offering around US$10,000 per reporter. Several million each may sound a lot to ask, but the problem is that any smaller amount won't serve as a deterrent to future action of this kind. A few tens of thousands is mere petty cash for a company like HP, and would merely be considered to be the cost of doing business - a bit like a parking fine would be for a plumber.

More on this case as it progresses through the courts. You never know, there might be more juicy revelations!

http://www.theregister.co.uk/2007/05/07/cnet_reporters_to_sue_hp/

More details are starting to emerge on the TJX computer break in that compromised nearly 46 million credit and debit card records. It seems that the thieves got in via an unsecured wireless network. It was set up with less protection than most people give their home networks! You would think that with a market capitalisation of nearly US$13 billion, they could have afforded to employ proper security...

http://www.theregister.co.uk/2007/05/04/txj_nonfeasance/

And talking of breaches of security, the US Transport Security Administration (TSA) - the body charged with protecting airplanes and public buildings - recently admitted that it managed to lose a hard drive. And what was on the hard drive? Just a mere 100,000 employees worth of Social Security numbers, bank data and payroll information!

Actually, they haven't actually admitted they lost it - just that they can't find it. Somehow, the phrase 'Economical with the truth' just keeps running round in my brain. I wonder why.

http://www.physorg.com/news97563880.html
http://www.theregister.co.uk/2007/05/07/tsa_loses_hard_drive/

Techno-freaks will be delighted to hear that the next US Census will use a specially developed handheld computer to register citizens. The rest of us may well be a little more dubious, especially given the track record of voting computers over the last decade.

The Census Bureau, working with Harris Corp and Taiwan based HTC has developed its own handheld, and it plans to deploy no less than half a million of them for the next census in 2010. A trial is taking place with the deployment of 1,400 of the devices in Fayettville, N.C. and Stockton, Calif. I wonder if they'll publish the results of the trial?

http://newsletter.eetimes.com/cgi-bin4/DM/y/e7PL0FypUC0FrK0FFGf0E8

And, finally, it seems that the Hollywood studios and their hench-organisation, the zippily named Advanced Access Content System Licensing Authority (a.k.a. the AACS), are having difficulty protecting their Hi-Def DVDs from the attentions of crackers. One of the encryption keys was cracked and distributed a few weeks ago. It was so widely distributed that the AACS has been unable to send out 'cease and desist' letters to all the offending web sites.

That could be coped with, since there is a way to revoke compromised keys, but now word is spreading of a hardware modification that completely nullifies the entire encryption system. Obviously, most people won't want to be playing about with soldering chips in their machines, but, where hardware leads, software soon follows...

http://www.physorg.com/news97576106.html
http://www.theregister.co.uk/2007/05/04/aacs_crack/


Scanner: Other stories

Owners of E-Gold indicted for money laundering
http://www.theregister.co.uk/2007/05/01/e-gold_indictment/
http://www.e-gold.com/letter3.html

Critical DNS fix stars in Patch Tuesday
http://www.theregister.co.uk/2007/05/04/ms_patch_tuesday_pre-alert/

Netgear routers add quality of service for home video streaming
http://www.physorg.com/news97848871.html

Open Source Venture Investment Through Q1 of 2007
http://lmaugustin.typepad.com/lma/2007/05/open_source_ven.html

StopBadware.org names top five malware hosting services
http://www.physorg.com/news98103853.html

Microsoft's Gates highlights parallel processing problem.
http://newsletter.eetimes.com/cgi-bin4/DM/y/e7Uk0FypUC0FrK0FFYD0ET

Eight things to know about Intel's quad-core, Penryn, Silverthorne & mobile plans
http://newsletter.eetimes.com/cgi-bin4/DM/y/e7PL0FypUC0FrK0FFGb0E4

Sun tries again with consumer-flavored Java
http://news.com.com/2102-1007_3-6181922.html?tag=st.util.print


Acknowledgements

Thanks to readers Barbara, Fi and DJ for drawing my attention to material used in this issue. Please send suggestions for material to alan@ibgames.com.

Alan Lenton
alan@ibgames.com
13 May 2007

Alan Lenton is an on-line games designer, programmer and sociologist. His web site is at http://www.ibgames.net/alan.

Past issues of Winding Down can be found at http://www.ibgames.net/alan/winding/index.html


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