The document discusses intellectual property (IP) rights including patents, copyrights, and trademarks. IP rights are intended to provide economic incentives for innovation by granting temporary monopolies. However, overuse of patents can undermine innovation by restricting the flow of ideas. Specific examples discussed include Amazon's 1-click patent, Microsoft's 2-click patent, and lawsuits brought by British Technology Group over software update patents. Whether the patent system helps or hinders innovation remains an open debate.

1. Lecture Jun 27, 2012
What are Intellectual Property (IP) rights?
•Patents, copyrights, trademarks
•“Temporary grants of monopoly intended to give economic
incentives for innovative activity”
•Without IP rights, there would likely be less motivation to
invent, create, and innovate
•NYT article: Debate on Intellectual Property
•WIRED article: Pirates of Kiev

2. Lecture Jun 27, 2012
Volti on IP rights (83-85)
•“…a legitimate desire”
•If [a business] has developed a novel technology, it wants the
benefits of that technology to accrue only to itself, and not to others”
•“The filing of a successful patent makes the inven-tion public” (less
secrets, via freedom of information) = benefit to the community
•Licensing

3. Lecture Nov-8-04
Volti on IP rights, cont.
•“However, patent protection may retard technological
development.”
•“A well-entrenched firm may suppress inventions that could
seriously shake-up existing routines, or even threaten the firm’s
existence.”
•“The danger of the patent system being used to stifle
competition has not gone unnoticed by the federal government.”
(Patent WMDs)

4. Lecture Jun 27, 2012
“Positive” IP rights
•Software
•Transportation techno-logies
(Segway, hybrid bus, etc.)
•Telecommunication technologies
(HipTop, Bluetooth, Treo 650)
© 2002, Segway © 2003, Danger Inc.

5. Lecture Jun 27, 2012
“Negative” IP rights
•Ongoing frenzy to patent any and every tech-nological advance,
business model / methods
•Undermine innovation (ie: chilling effect)
•Unnecessarily restrict the flow of ideas / diffusion of
technological advances.
Jeff Bezos’ “1-Click” patent
Microsoft
British Technology Group software update case
British Telecom hyperlinking case

6. Lecture Jun 27, 2012
Amazon “1-Click” Patent
•Jeff Bezos, CEO
•Only company that lets customers
purchase items with a single click
•Licenses this technology to Apple and
others
•Successfully sued B&N
© 2003, Amazon

7. Lecture Jun 27, 2012
Is Bezos right or wrong?
•Shameless exploitation of a “common
sense” technology?
•He got there first
•Jupiter Communications study: 27 % of
online buyers aban-doned at least one order
before completion, because experience was
“too exasperating”.
© 2003, Amazon

8. Lecture Jun 27, 2012
Bezos, cont.
•“Despite the call from many thoughtful folks for us to give
up our patents unilaterally, I don't believe it would be right for
us to do so.”
•“We’ve spent thousands of hours to develop our 1-Click
process.”
•Ecommerce Times:
Apple Licenses Amazon 1-Click Technology
•Any thoughts?

9. Lecture Jun 27, 2012
Microsoft “2-click” Patent
•For handheld systems
•“now-patented technology is to make it easier for users to launch
applications by either double-clicking a button or holding one
down.”
•Microsoft currently considering seeking payments from “those
who employ technologies covered in the patent”,
When Two Clicks Equal One Patent

10. Lecture Jun 27, 2012
British Technology Group (BTG)
•Famous for winning 1989 case against Pentagon, over hovercraft
patents
•Now claims six patents on “web-enabled software update
technology”, UK Firm Patents Software Downloads
•Currently suing Microsoft and Apple over this
•Also suing B&N, Amazon, and Netflix, on unrelated patent issue

11. Lecture Jun 27, 2012
BTG, cont.
•Antivirus companies (Norton, Symantec, etc.) could be next
•“BTG claims Microsoft's and Apple's operating systems,
and MS Office products, infringe patented technologies. ...It
seeks unspecified royalty payments for past infringements
and injunction against future uses of its software.”
BTG Sue Apple and Microsoft Over Software Downloads

12. Lecture Jun 27, 2012
British Telecom Hyperlinking case
•BT claimed to hold patent on hyperlinks
•Asserted that “every single hyperlink used on every U.S. website
was utilizing intellectual property the company patented in 1976
and should therefore be subject to a licensing fee.”
•Sargent patent
•Case dismissed; deemed without merit
•WIRED: Judge Tosses BT Hyperlink Case

13. Lecture Jun 27, 2012
BT Hyperlinking case, cont.
•What if it wasn’t dismissed?
•How would this affect the Internet?
•How might this inhibit technological
change / diffusion of technology?

14. Lecture Jun 27, 2012
Sometimes Patents are just Absurd
•U.S. Patent 5443036: Method of Exercising a Cat
•“A method for inducing cats to exercise consists of directing a
beam of invisible light produced by a handheld laser apparatus
onto the floor or wall or other opaque surface in the vicinity of the
cat, then moving the laser so as to cause the bright pattern of light
to move in an irregular way fascinating to cats, and to any other
animal with a chase instinct.”

15. Lecture Jun 27, 2012
More Volti & IP
•“Whether the patent system serves as stimulus or hindrance to
technological advance is a matter of considerable debate, and
one not likely ever to be settled.” (85)
•“it is virtually impossible to determine if its advantages
outweigh its disadvantages, or vice versa.” (85)