CLIP "Compulsory Licensing of Intellectual Property"

Proposal for C.L.I.P (“Compulsory Licensing of Intellectual Property”) By Dan Abrams February 10, 2008 My claim: Invention is primarily what makes life better for humanity over time, not business (and increasingly not the legal system). Business is good primarily insofar as it encourages advancement for humanity. The current patent system may be good for business but not for advancement. What is the purpose of intellectual property protection? 1) To encourage advancement by providing inventors of IP with a profit incentive 2) To reward such advancement seems fair. What is the motivation of the current U.S. patent system that provides a temporary monopoly to the first inventor? 1) The inventor should have control over his/her invention 2) Making it incumbent upon the inventor to profit from his own invention motivates not just the advancement but also the commercialization/popularization. What are the negative ramifications of the current system of patent monopoly? 1) A competitor threatened by an invention has a motivation to purchase the patent rights for the purpose of killing its competition by simply preventing the any use of that invention. 2) Businesses predicated upon IP have an incentive to be secretive and non-collaborative (which is antithetical to scientific advancement). 3) Inventors must also be entrepreneurs or else be otherwise beholden to businessmen to commercialize their ideas. This reduces the incentive to invent and further motivates the smart people to become businessmen over inventors. 4) Patent infringement lawsuits are expensive and an unnecessary burden on the courts. The patent lawyers end up getting hourly fees on top of massive percentages of judgments and settlements. There is an incentive to use the patent monopoly as a pure business tactic to hinder the competition or to extort lucrative settlements. What is my solution? C.L.I.P (“Compulsory Licensing of Intellectual Property) The following is one possible implementation of the CLIP concept. Of course, specific terms and aspects would be subject to political and legal wrangling as well as corporate diplomacy. For a 5 year window inventors applying for patents could select a traditional patent or a CLIP patent. After that probationary term only CLIP patents would be possible. What is a CLIP Patent? A CLIP Patent offers the inventor 50 (fifty) years of profit incentive but not necessarily a monopoly. A CLIP Patent confers upon the inventor a monopoly only if no one takes advantage of the “compulsory licensing” system. How does the “compulsory licensing system” work? A company interested in using the compulsory licensing system of a particular CLIP Patent must abide by certain strict rules. 1) They must set aside the greater of 5% of the retail price or 10% of the profit of the good or service that they sell that will employ the CLIP Patent to go into the “inventors’ revenue pool” (IRP). They would have to agree to “open the books” to independent auditors with a “pot-odds disincentive system” that would penalize them at a premium above the likelihood of getting caught multiplied by the amount they attempted to improperly exclude from the IRP. This would encourage fair & honest accounting (not “Hollywood accounting”) for the inventors’ share. 2) The inventors’ pool for that good or service is put in an escrow account (in the safest/most conservative of financial instruments - like US Bonds) that is regulated by a new branch of the USPTO called the “Inventors’ Revenue Pool Service”. The interest on the IRP would be distributed as defined by the inventors’ relative shares in that IRP. If your invention were used for 50 years (like a projection tube TV) you would be handsomely rewarded but not nearly as much for Plasma TVs. 3) Every year, interest from a given IRP are distributed to all the inventors of record. This would be determined initially by the corporation (based on standardized guidelines) but subject to arbitration much like the Writers Guild of America’s screen-credit arbitration process. An independent organization would evaluate the merits of inventors’ contentions that they deserve a greater share than some other inventor. 4) The standardized guidelines would be established by an expert task force for each industry. There would be less incentive to “game” this system (compared to the current monopoly system) because they know they have to pay a set amount into the IRP so they shouldn’t care too much about how it’s split up. The current monopoly system has such vastly varying extremes of outcomes that litigation is unavoidably a huge part of the game. An example of standardized guidelines for a new computer printer might take existing distributions of inventor shares (all publicly available on the web) as precedent balanced against the arbitrator’s assessment of the value to that particular product. So if the printer previously used 24 CLIP Patent inventions but now used a new wireless technology then maybe the floor for the new invention would be 4% and the ceiling would be 20% of that IRP. If one invention replaced another then that would be reflected in the share of the IRP. What are the benefits of the CLIP Patent system? 1) Encourages innovation with a longer profit cycle without encouraging the “killing of progress”. 2) Better inventions are more likely to be effectively brought to market because competition doesn’t bind the inventor to a particular company (a variable which can only hurt the chances of the best product being best implemented commercially). Either the new product is better or worse that what already exists. If it is better and the particular company with the monopoly is anything short of excellent then the chance of the best product prevailing are diminished. On the flip side, if the new product is worse but is superbly marketed then the success of the better product that already existed is therefore diminished. 3) Businesses using the CLIP system have a known, quantifiable cost system for invention. 4) There is also a limit to any damages that could potentially arise from infringement. Their cost of litigation should drop substantially. 5) There would be less incentive to develop “me too” technology that only nominally differentiates itself from a previous invention. More development would go into genuine breakthroughs that would stand the test of time. Think of 50 years of CLIP revenue for an AIDS vaccine as opposed to developing another version of Lipitor. ADDITIONAL IDEAS: - Maybe to address the problems of a first-to-file “winner take all” system would be to set aside some portion of the IRP to “researchers in the field”. That way those who publish foundational research in a field (on which the invention is based) can still profit in some way. The RITF could include anyone who published on the internet. If they could prove that they played a role in an invention then they could apply for arbitration. Maybe with 100 “votes” from recognized members of that industry (in good standing) someone could get a hearing. Every vote that is subsequently validated in arbitration would add credibility to that member of that industry (for subsequent votes). Every vote that is subsequently ruled invalid in arbitration would commensurately tarnish the voter’s record. Maybe with 1000 votes an arbitration ruling could be appealed. - In arbitration there could be limits on presenting your case (as a nuisance lawyer disincentive) like only 2 days to make your case and 1 day to rebut your rival. And if you lose you have to pay a fee to the IRP or arbitration (but not court costs nor rival’s legal fees). OK, that’s my first draft of the CLIP concept. Poke holes in it. Let me know its flaws and game-able aspects. For now it’s only a thought experiment. But in time it could evolve into groundbreaking policy. I appreciate your consideration. Good karma to you. Regards, Dan Abrams

Re: ERRORS in "U.S. v Microsoft: Who Really Won?" by Thomas Hazlett http://www.ft.com/cms/s/0/a94d92e0-cd99-11dc-9e4e-000077b07658.html Thomas Hazlett got some points objectively, provably wrong. 1. Hazlett wrote: "Meanwhile, Microsoft’s Internet Explorer is coughing up market share to Mozilla, Netscape and Opera, browsers that ride comfortably on Windows." The Netscape browser went out of business. http://blog.netscape.com/2007/12/28/end-of-support-for-netscape-web-browsers/ CURRENTLY: Microsoft IE has a market share of over 75% Firefox has a market share of about 15% Opera has a market share of about 1% Netscape is under 1% http://marketshare.hitslink.com/report.aspx?qprid=0 http://www.thecounter.com/stats/2008/January/browser.php http://en.wikipedia.org/wiki/Usage_share_of_web_browsers Look at the chart over time and you'll notice a solid correlation between the time Microsoft was losing market share to when the DOJ was fighting it's oppressively monopolistic and anti-competitive practices. 2. Hazlett wrote: "(Apple) is crushing Microsoft in media players." But that has nothing to do with Microsoft's operating system monopoly or any of Hazlett's conclusions. "That a software giant proved helpless against competitive forces (iPod & Google) is an important lesson." That doesn't address the point of anti-trust regulations. His point is as absurd as if I wrote that Microsoft "proved helpless" against Starbucks' growth in the coffee business. Sure Microsoft was ineffectual in two businesses it didn't have monopoly power over (Media Players and Search Engines). But in operating systems it has maintained its monopoly. APPLE's market share is at its highest in years with 7.3% versus Microsoft's 91.8% dominance of the operating system market. http://apple20.blogs.fortune.cnn.com/2008/01/01/survey-mac-os-hit-record-73-share-in-december-iphone-up-33/ How can anyone support conclusions based on incorrect facts? When the public is tricked into thinking absurd conclusions based on absolutely, objectively verifiable errors how are we to feel? Is it a coincidence that the errors advance an agenda? Is it not deliberate?

There is no existential threat to America (including Radical Islam)

I am not the first to say that - "There is no existential threat to America, including Radical Islam." Remember the Sherlock Holmes reference - "THE DOG THAT DIDN'T BARK"? Surely, you're aware of how pathetic our security is at airports. The GAO reported November 15th,2007 how easy it is to sneak bombs and bomb parts onto an airplane in the U.S. All 19 out of 19 airports tested had their security completely breached! This is no secret. All our enemies know this. To be overly fair to the counter-argument, let's assume that 99% of attempts to get bombs on planes are intercepted by security (btw - That's a fantastically high number. Various previous reports show 25% or more get through. And given enough attempts all airports have proven terrifyingly beatable.) So if you're an enemy of America and 9/11 proved so damaging, then you would keep attacking the vulnerable spots. To take down 100 planes would require 10,000 people (assuming 99% are caught). Sincere there are over 1 billion Muslims, that would only require 1/1,000 of 1% of their population!!! The planes haven't been blown up. THAT'S THE DOG THAT DIDN'T BARK! What's more 30,000+ Americans commit suicide every year (that's 1/100 of 1%) and 500,000 attempt suicide every year (that's 1/6 of 1%). If Muslims have approximately the same rates of suicide, then recruiting suicide bombers (just among those who already want to kill themselves anyway) should be shockingly easy. CONCLUSION: Sure, a bomb could get through and blow up a city. But the odds are massively, exponentially higher that you'll die of something much more prosaic. So don't fear attacks in the U.S. and stop wasting money on war & defense that create enemies. Remember that most everyone on the planet just wants to live their own lives, feed their kids and survive. Let's say you're the president of the U.S.A. : 1) If you do nothing wrong there's still some chance that the psychos who have messed-up, untreated brain chemistry problems will still try to kill Americans. 2) If you make America appear selfish and immoral then that group gets bigger because the borderline mentally-ill with propensities towards violence will "join their cause". 3) If you attack a sympathetic victim, then that group gets bigger still because then the "righteous" who have little to lose will join their cause. 4) If you attack someone's country then that group gets even bigger because the patriots and standing armies join the fight. 5) If you kill someone's neighbor or friend then even those who tend to be pacifists will be more likely to quit their job & leave their family to "defend their homeland". 6) Finally, if you kill a member of someone's family then the odds that they'll want to kill you skyrocket which is why... "WAR BEGETS WAR."

"Forget 'inequality'. The problem is 'Extremity' in economic distribution."

Some inequality is necessary in economic systems. Even if communists could get their way and everyone was at the same economic level it wouldn't commensurately increase happiness or productivity. Research on lottery winners and victims of crippling accidents shows that after one year nearly all return to their previous happiness set-point. Humans have chemically set happiness equilibriums. Where more money makes a lasting difference on happiness is in bringing people out of poverty. Being in poverty depresses happiness well beyond individual set-points. Consequently, capitalism's "inequality problem" is only a material issue when there is poverty that can be alleviated without having a noticeable effect on the wealthy that can relieve that poverty. My thought is that we should forget talk about "wealth disparity" or "wealth inequality". Those terms evoke unappealing visions of communism. The problem is extreme wealth disparity or what I like to call "Extremity". Pharoahs, Kings, Czars; this kind of disparity is ripe for revolution. Regular old inequality is not only acceptable but necessary to create incentives for hard work and innovation. Extremity is what is dangerous.

"Corpania’s Theory of Productive Wealth (P*Wealth)”

"Corpania’s Theory of Productive Wealth (P*Wealth)” Karl Marx got it wrong but for some of the right reasons. Capitalism is more efficient and productive than a totalitarian state (regardless of its intentions). Capitalism’s best argument is with the analogy of 10 people making pies. The theory is that the poorest guy, who would get 1% of the 5,000 pies made in a capitalist economy, is better off than that same guy getting an equal 10% share of the only 100 pies made in a communist society. Capitalism's free market is akin to the Darwinian jungle. In the jungle the strong kill the weak and species die out. In contrast, in every just democracy every citizen is endowed with equal rights & powers (voting). But these two concepts are inherently at odds (which isn't entirely bad). Equality is simply not Darwinian. Let's escape the metaphor and return to political reality. Capitalism is preferable to the extent it is more productive balanced by one's concept of equality and fairness. A Libertarian wants as much freedom with a minimum of "government redistribution". A Totalitarian Communist values equality so strongly that rights, freedom and productivity are sacrificed. Depending on one's values and principles one places oneself somewhere on that spectrum. This is all well tread ground. With this foundation established, let's get to my take on "Productive Wealth". Hypothetical: Zeke constructs a new 4-story building (to hold 16 tenants) in an up and coming neighborhood for $2 million in costs. It was estimated to last for at least 40 years without major repairs. Yanni the real estate developer sees the climbing prices and offers Zeke 3 million dollars with he takes. Zeke has just made a 1 million dollar profit that is part of the GDP. Yanni then spends $500k leveling the building so he can erect a 10-story building (at a cost of 4 million dollars) which will hold 50 tenants for at least 40 years. Yanni has thus spent $7.5 million when Xena comes along and offers $10 million which Yanni accepts (making a $2.5 million profit which adds to the GDP). Xena then sells each of the 50 units for $300k each totaling $15 million (for a $5 million profit). Now let's look at the macro economics. On the same parcel of land $8.5 million in profit was made while $6.5 million was spent in the local economy in construction and leveling and construction again. The non-money productivity result (aka "productive wealth") was 50 housing units that would last for 40 years. So it cost $6.5 million in non-profit costs to build 2000 "housing unit years". Which translates to $3,250 per housing unit year. Nothing particularly unusual about this situation.

But consider the alternative. If Zeke's 4-story building were left standing and Yanni built his 10-story building somewhere else then $500k in demolition costs could have been saved and another 640 "housing unit years" (16 units times 40 years) would have existed. This would have resulted in a per housing unit year cost of only $2,273 (= $6 million / 2640). A free market proponent would validly argue that the individuals involved made their own choices and that's exactly what "freedom" is. However, the net result in productivity is the same. Because of the free market these individuals were allowed to make choices that were NOT optimally productive nor efficient. Less "pie" was created. This is contrary to the fundamental benefit of capitalism, its productivity and efficiency.

"Productive Wealth" is profit that results in a larger pie (independent of how that pie is distributed). Zeke's venture created "p*wealth". Yanni's venture also yielded p*wealth but subtracting the "destroyed wealth" of demolishing Zeke's building Yanni's net p*wealth created was 1360 building unit years (=2000 - 640). Xena's business dealings yielded no p*wealth but did create profit. My conclusion is that a GDP that considers only profit (and not p*wealth) vastly distorts the true view of the economics as it practically applies to people. A quick second example: One has "personal music player needs". If one pays $200 for an iPod and it lasts 4 years then one is paying $50 per year. If Apple decides to make the iPod shoddier so that it will likely break after 2 years then Apple could potentially sell twice as many iPods. Hopefully the market wouldn't let that happen because such a drop in quality should result in less sales. However, consider the flip side. What is Apple's incentive to create an iPod that lasts 5 years or 10 years? "Planned Obsolescence" is common description of this dynamic. It ties directly into my concept of p*wealth. If iPods were made more durable the labor wasted on re-making the personal music player could have been used creating more p*wealth. Just like not destroying Zeke's building.

Money is Not Speech

“Money is Not Speech”: I know the argument against campaign finance reform is that the Supreme Court declared money to be tantamount to speech and thus protected under the first amendment. That’s wrong. Here’s my proof:

1) Bribery is giving money in exchange for political influence.

2) Bribery is wrong & illegal.

3) Speaking to politicians can influence their politics.

4) Speaking to politicians must not only be legal but is necessary in a democracy.

5) If “money is speech” then giving money to influence politics would have to be legal (q.v. “Transitive Property”). But that conflicts with point 2) Bribery is wrong & illegal. Therefore “Money is Not Speech”. QED.

One cannot simultaneously contend that “bribery is illegal” and “money is speech”.

Someone intent on believing that “money is speech” and therefore that there should be no controls on it (on first amendment grounds) should be intellectually consistent and simply accept that bribery should be legal. Good luck on that.

And let me also make the obvious case for why bribery should be considered wrong & illegal. If it’s ok to bribe then there would be a bidding war for every money-related vote. Why should a politician vote for a billion dollar pork-project to go to Briber “A” when Briber “B” is willing to give a bigger bribe? Then all political votes would be vulnerable to being solely at the discretion of the bribe-market. When would a politician ever vote for the environment or the poor? And now let’s play this scenario out to its logical conclusion. With a trillion dollar government budget at stake the bribes could easily exceed billions of dollars. Conceivably, the biggest corporations could buy up all of the media companies (TV, radio, print, internet) and never report (or minimize the reporting) of the rampant bribery so that the electorate would never know the truth. Now we don’t want that scenario. Do we? Or do we already have it?

Invention is dreaming followed by problem-solving.

Invention is dreaming followed by problem-solving.

Everyone dreams. Some people do have more practical dreams than others. The real work is in the problem-solving. My favorite basic process of invention: 1) Identify the problem. Isolate the variables to determine the specific problem to be addressed. 2) Question the most basic assumptions. Explore radically different new assumptions in as many directions as you can brainstorm. Maybe the problem can be solved by asking a different question. 3) Question the current solutions. Explore different ways to solve the problem. Brainstorm new solutions without regard to practicality. 4) Now evaluate your solutions practically. Do cost-benefit analysis on all of your alternate solutions. Make sure the cure isn't worse than the disease. 5) Implement your best solution and then do a post-mortem. Evaluate your solution's effectiveness to better solve the next set of problems. Go back to step 1 and repeat.

Thoughts for Democrats #4 - “Greedy Grafters” not “Special Interests”

Stop calling them “Special Interests”. It’s not pejorative enough.

I propose calling them “Greedy Grafters”.

Everyone intuitively thinks they have special interests. So “Special Interests” sounds like you could be referring to them.

Whereas “Greedy Grafters” sounds as bad as they are and has the marketing benefit of alliteration.

2nd New Format for Political Talk Shows - "Honesty Contract" & Contest

Another way to make political talk shows better would be to have an "Honesty Contract". Guests & Hosts would be required to sign the contract with the following conditions. 1. I promise to tell the truth and not to lie (intentionally deceive through falsehood). If it can be proven that I lied then I promise to apologize on-camera ASAP (within 48 hours) and correct the misapprehension. If that is not possible then I promise to give my apology via voicemail ASAP (within 48 hours) to be used until I make my on-camera apology. 2. I promise to provide a reasonable context so as not to "weasel" (selectively tell the truth so as to mislead). If it can be proven that I lied then I promise to apologize on-camera ASAP (within 48 hours) and correct the misapprehension. If that is not possible then I promise to give my apology via voicemail ASAP (within 48 hours) to be used until I make my on-camera apology. With "weasels", I understand that I will be allowed to make my properly contextualized new argument. 3. If it can be proven that I made an substantial error of fact (not opinion), I promise to apologize on-camera ASAP (within 48 hours) and correct the misapprehension. If that is not possible then I promise to give my apology via voicemail ASAP (within 48 hours) to be used until I make my on-camera apology. 4. If I break any of the above 3 points without taking the proper steps to correct them then I will pay the ACLU (insert charity/non-profit here) the amount of $10,000.00 within 60 days. If I do not pay that amount within 60 days then I will have to pay additional fees of $1,000.00 per day until I have paid it off. 5. If I don't break any of the above rules then I will be eligible for the show's "Honesty Contest" where the person who tells the most truths without lying while also correcting all "weasels" and errors will win the grand prize (of $100,000.00). Signed X____________________________

New Format for Political Talk Shows - "Vetting Graphics"

There should be a new format for viewing vetted political talk shows. These "vetted talk shows" would always be tape-delayed to allow for research/corroboration. Whenever someone says something that is provably true it is highlighted with a green icon graphic and the website for corroboration. Whenever someone says something that is provably ambiguous (valid points in both directions) it is highlighted with a yellow icon graphic and the websites for corroboration. And whenever someone says something that is demonstrably false it is highlighted with a red icon graphic and the website for corroboration. In this way viewers would better be able to process the information.

Thoughts for Democrats #3 - Better Define the word "Lie"

The old definition of a "Lie" is a falsehood with the intent to mislead. But there's no objective way to know intent. More importantly, if you're trying to convince a voter that someone he has voted for in the past has "lied" then you're implicitly saying that the voter is a bad judge of character. The voter has implicitly emotionally endorsed the liar and to expose that arouses cognitive dissonance. There's an "emotional inertia" dynamic working against the accuser. THE NEW (PROPOSED) DEFINITION OF A "LIE": A stated falsehood that benefits the speaker without subsequently correcting it. Full Definition: A statement that is substantially false where the resulting misapprehension benefits the speaker/writer without a subsequent, commensurate follow-up to correct the misapprehension and prevent its repetition. This new definition has three objective criteria. 1) Falsehood (if it's true then it can't be a lie by definition) 2) Benefiting the speaker (otherwise it's simply an error) 3) Lack of subsequent correction (this is the requisite reckless disregard for the truth. But if there is a bona fide correction and prevention of its repetition then you can grant the benefit of the doubt and not call it a lie). All three criteria can be independently determined without "reading someone's mind". With this new definition calling something a lie is objectively provable. Consequently, no one can be rightly offended if the objective criteria are proven. Therefore, we can call some Republicans liars without offending their base.

Thoughts for Democrats #2 - Deputize Everyone

"Deputize Everyone" - It's not just "every vote counts" or even "vote or die". But rather make everyone a Democratic Deputy. Anyone who has worked at a volunteer organization knows that those with the least responsibility flake the most. Those given more responsibility will often flake but you'll still get much more done. So let's give everyone more responsibility. Hand out dollar-bill sized slips of paper (that people can save in their wallets & purses) with the following words: --------------------------------------------------------------- Side A Thank you for working as a "Democratic Deputy". To make sure we win, it's your responsibility to make sure that every single Democrat you know votes. Here's why: (list provocative reasons & facts with websites for corroboration) --------------------------------------------------------------- Side B List the Democrats you know and check off what gets done. My Democrats: ---------------Conversation? / Registered? / Voted? 1) ____________________ -------------- / ------------ /------- 2) ____________________ -------------- / ------------ /------- 3) ____________________ -------------- / ------------ /------- 4) ____________________ -------------- / ------------ /------- 5) ____________________ -------------- / ------------ /------- 6) ____________________ -------------- / ------------ /------- 7) ____________________ -------------- / ------------ /------- 8) ____________________ -------------- / ------------ /------- 9) ____________________ -------------- / ------------ /------- 10) ___________________ -------------- / ------------ /-------

Thoughts for Democrats #1 - Iraqi Casino

Frame the debate about the war as the "Iraqi Casino". Sure it would be great to come out a winner. But when you're losing more each day (with the same strategy) it's time to leave before you lose even more. Because maybe it's a rigged/crooked game that can't be beat.