Tuesday, September 16, 2014

On encouraging research

Everyone agrees that research is often required before products can be brought to the marketplace, but there is vast disagreement regarding the way in which research should be encouraged.

Take this company, which has been in the news lately. This company began with a goal of researching a particular twentieth-century problem.

Personal Audio, Inc. was founded in 1996 with a mission of offering personalized audio to listeners over the Internet. The company worked to develop an audio player that could download, store and manipulate audio files to fulfill this mission.

So did this lead to the release of a Personal Audio player? Not exactly.

This system along with related ideas was described in several patent applications filed in October 1996. The Company’s system and patent application pioneered techniques now commonly used today in smartphones, tablets and other devices that store and play audio and video files that work with downloaded playlists, Other pioneering innovations included the uploading and distribution of episodic content such as podcasts and serialized television shows.

The Personal Audio patents issued starting in 1998. In 2009, Personal Audio, LLC was founded to market the innovations described in the patents and Robins, Kaplan, Miller & Ciresi L.L.P. was engaged to assert the patents against Apple Inc. and others. The complaint resulted in a jury trial in July 2011 and Apple was found to have infringed U.S. Patent 6,199,076.

Some people do not view Personal Audio's efforts as a good thing. Here's how a TechDirt writer describes the company:

Personal Audio, the patent troll that ridiculously pretended to own a patent on "podcasting"...

Only one problem with TechDirt's "pretended" characterization - the courts don't agree.

Personal Audio LLC sued the [CBS] television network last year, alleging that its patented "system for disseminating media content" in sequenced episodes was infringed upon when CBS started posting podcasts online of television shows like "60 Minutes" and "Face the Nation."...

A jury on Monday rejected claims by the network that Personal Audio's patent claims are invalid.

Now TechDirt and the Electronic Frontier Foundation and others (presumably including CBS) believe that patent law should be modified to prevent abuses by patent trolls. And there have been bills in Congress to reform patents, but none of them has passed. Why not?

Ron Eritano, director of federal affairs for The Normandy Group, a Washington lobbying firm, has been working with a variety of clients for the passage of a patent-troll bill. Eritano said the most outspoken opponents of the bill have been the bio-pharma companies, which hold large patent portfolios and like the laws governing patents the way they are.

"They've utilized the system for a long time, and it's worked very well for them, particularly as it relates to interactions with generic drug makers," said Eritano.

Other industries and companies with large patent portfolios...have lined up against the bill, too. Universities are worried that their research and development efforts could be hindered....

Trial lawyers have come out against the reform, and particularly against fee shifting, which would make it easier to collect legal fees if the target of a patent-troll lawsuit demonstrates there was no patent infringement.

It's not often that you get trial lawyers and universities and large companies on the same side of an issue, but patent reform appears to have done it.

One can ask the question - isn't a large company or university worried that a patent troll will go after them?

Presumably, these institutions believe that they can lawyer up to outlast any patent troll.

So despite the wishes of the self-enthroned Defenders of All Freedom, patents won't change any time soon.
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