Steven Pearlstein, actually... That's the second columnist whose had his first name changed in the last week. Perhaps you should take up a sideline in baptisms. :-)

It strikes me that the concern that corporate general counsel should have is not with the substantive reach of the IP laws as much as with a basic mistrust that the courts will apply the rules appropriately in specific cases. If you're not stealing someone's IP, you shouldn't have to worry about the IP regime, but for the fear that you will be nailed for something you didn't do. Analogously, Richard Epstein has argued that the problem with medical malpractice laws is that there is little coincidence between instances of malpractice and cases in which juries award damages. As a result, the system fails to deter, and works a random redistribution. At least, that's what he's said.

To me, the only thing MORE amusing than hysterical politicians, journalists (AND economists :) is hysterical 'corporate general counsels everywhere'...

Pardon my density, but I don't understand the source of corporate fear in the example. I'm a company, I have an idea that _may_ be patent-worthy, but I don't want the patent. What's going to happen? A lawsuit from shareholders demanding that I get the patent? Some reverse jujitsu move from a competitor who uses the same idea and sues because he doesn't have to pay royalties? What am I missing?

RE: Epstein's claim, the relationship may not be as strong as we would like, but all of the statistics I've read suggest that the vast majority of successful malpractice suits are brought against a tiny percentage of all doctors (like 80% of suits won against 5% of MDs). In other words, bad doctors get sued a lot - exactly how the current system is set up to work. Which is why, if the AMA cared about the problem, and not about its constituents, they would promote some sort of 3 strike-you're out system for MD licensure. One malpractice is a mistake, two is a fluke, three is a lunatic running around the hospital with a stethoscope....

Not criticizing, but IIRC the MacDonald's case was actually serious and was trivialized by propagandists.

[Agreed. But you should never hold cups of hot coffee between your thighs, even if they aren't boiling hot.]

In the McDonalds case, there was an audit trail showing they deliberately ignored warnings about their unsafely hot coffee because the hot coffee would steam longer and look more appetizing. The lady in question suffered third-degree burns and was granted relatively modest compensation. Since that was not punitive enough for a megabucks corporation like McDonalds, a heavy fine was slapped on, but those proceeds went to the Shriner hospital for burns.

For more details:

http://www.bbc.co.uk/dna/h2g2/A429950

While "Powderhound" is an attractive word that might garner trademark protection, I don't think the author's fear that an open airline ticket could be a patentable "business method" has too much to it: to go through some legal formulae, while it may fulfill a need not satisfied by anything in the marketplace, it's hard to see how it's novel, or non-obvious (commuter railways do it all the time). Of course filing for a patent and pursuing nuisance suits is still a strategy some might pursue.

I did hear some surprising stuff about business method patents recently, though: according to a Big Firm lawyer, investment banks and others are busily filing patent applications for novel financial instruments and other products they develop. To mention two examples: the "Bowie Bond," which securitizes the future royalty streams of a musician's copyrights, and an (allegedly unique) method for using tax losses generated by short covers to offset capital gains. The point being that if you really patent those things, rockstars and hedge funds will have to come to you until your patent expires.

I imagine the goal is (1) to justify and enforce underwriting premiums and (2) to make whatever you sell to brokers, or the public, look less like a commodity. It seems like a good question whether the banks' investment in pursuing patents (filing, litigation) will cost less than the value that would have been lost through bank inaction in the absence of protection. My suspicion is that the effect of (1) and (2) would mainly be to give banks a bigger piece of the pie, more than to give us a bigger pie of deployable capital. But I suspect the financial economists already know what's going on there?

Tyrone writes, "If you're not stealing someone's IP, you shouldn't have to worry about the IP regime..."

The real problem is not these high-profile cases where someone has in fact arguably stolen someone else's invention, but rather the insidious effect that the software and business method patent mess has of discouraging people from starting businesses to provide innovative software. Because so many software patents have been granted on ideas which are just obvious -- sometimes even well-known -- techniques, you can very easily end up infringing some patent with an original but garden-variety design all your own. Because patent applications in the US are secret until approved, even if it were practical to read the patents already granted on related techniques (and it's not), that would not protect you against the danger that there might be a patent in progress on your technique. Moreover, it is entirely possible for someone to patent a technique that had been in use for years _before_ they thought of it, if no one had publicized it or tried to patent it, and because for decades software could be protected only by copyright and trade secret methods there are many such techniques (there may have been changes in the law on this to give some protection -- I know there was talk of it).

http://arstechnica.com/news.ars/post/20041201-4428.html
http://perens.com/Articles/PatentFarming.html

JRoth,

Your statement that “all of the statistics I've read suggest that the vast majority of successful malpractice suits are brought against a tiny percentage of all doctors (like 80% of suits won against 5% of MDs)” is in the true-but-misleading category. The huge majority of suits are not against “bad doctors,” but against doctors in high-risk practice areas—primarily obstetricians, radiologists, and emergency-room doctors. So yes, a very limited number of doctors suffers most of the verdicts, but that is based on mainly specialty rather than skill.

SamChevre

FYI - Steven continued the discussion in the Post' Live Online.
(http://www.washingtonpost.com/wp-dyn/articles/A44133-2005Feb22.html)
During that interchange, one respondent (presumably a patent attorney) claimed that Steven's idea had already been patented. Talk about IP gone mad!
(and by the way, I got the name right at my blog - www.intangibleeconomy.org) -- Ken Jarboe

JRoth: I think your problem is that you've conflated "customer-provided patentable idea" with "patentable idea from somebody within the company".

If a company starts doing something that a customer thought of and told them about, that customer can, as Pearlstein said, make claims on any income derived from the idea, unless the customer has gone out in advance, patented the idea, and then sold his patent rights to the company.

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