Discouraging inventors and tax dodgers

Major patent “reform” has passed both houses of Congress, presumably the President will sign shortly. This is called the “America Invents Act,” apparently has as much relevance to invention as the Patriot Act has to patriotism. But dictionary.com tells me that “invent” has two meanings:

1. to create or devise (new ideas, machines, etc)
2. to make up (falsehoods); fabricate

Perhaps the second is what’s intended here.

From what I read, the big news is a switch of priority from “first to invent” to “first to file,” which seems to indicate that skill at patent lawyering now is officially recognized as more important than skill at inventing.

Better news, according to Vaughn Henry, is that tax strategies will no longer be patentable. 150 existing patents are grandmothered in, however. (Information from Henry’s blog here, you need to join, free, to see it, or perhaps it is somewhere on his site. )

Producing electricity from waste heat

The general concept of using waste heat from one process as an energy source for another is quite old, but this report says that some University of Minnesota researchers have figured out a practical way to generate electricity from it. It involves a new alloy which changes magnetic properties when it’s exposed to heat. Of course I have no idea whether it’s practical, or even whether some patent troll will step in to exact a fee for its use. It will be interesting to check back in a year or two and see what has become of it.

And let’s remember, it was publicly funded (fortunately completed before the State of Minnesota suspended operations)

Funding for early research on the alloy came from a Multidisciplinary University Research Initiative (MURI) grant from the U.S. Office of Naval Research (involving other universities including the California Institute of Technology, Rutgers University, University of Washington and University of Maryland), and research grants from the U.S. Air Force and the National Science Foundation. The research is also tentatively funded by a small seed grant from the University of Minnesota’s Initiative for Renewable Energy and the Environment.

(No, I don’t know what “tentatively funded” means regarding completed work.)

This is your technology. Don’t let the big guys take it away from you. Famous photo, unless it has been relocated

Banksters vs. Patent Holders

The Capitol Hill site Roll Call reports that a proposed bill would make it harder for holders of “business process patents” to sue banks which they claim are infringing. Frankly I do not understand the details, what a “government review of the patent’s validity” means, since I thought patent examiners review all applications before a patent is granted. An opposing lobbyist is quoted as saying “This is nothing less than an earmark for big banks disguised as a new government program.” One presumes that bank lobbyists have something equally cogent to say, but somehow that didn’t get into the article.

Unfortunately, it seems very unlikely that both sides could lose this one.

Inside Job gets outside

Prize-winning documentary Inside Job was posted for free download at archive.org a few days ago. It was withdrawn late yesterday or this morning, but in the interim I had a chance to watch it. It was pretty much as I expected: A very well-documented expose of the forces which brought down the world economy, emphasizing that they have been rewarded, not punished, for doing so, and essentially escaped prosecution (some paid fines amounting to a small part of their takings.) It’s well put together, director Charles Ferguson seems to be a skilled and persistent interviewer, getting on-camera answers even from some of the guilty parties. Ominous music reflects our ominous economic future, lots of shots showing the Manhattan skyline, other centers of wealth, as well as foreclosed houses and abandoned developments.

As a documentary with a point of view, this film says “The guys who drove us off this cliff and unpunished and still in charge,” which might lead one to suppose that, if only they could be caught and punished, perhaps our long-term future would become brighter. These guys own the government, of course, so exactly how a prosecution would work isn’t clear. Elliott Spitzer’s experience, reported in the movie, does not make one optimistic.

The problem, as I see it, is that Inside Job doesn’t tell the story from the beginning. I would represent the principal causes of the global financial crisis as the five connected items below

5 Regulatory capture and control of the government

↑

4 Concentration of financial power

↑

3 Securitization

↑

2 Loans against capitalized rent

↑

1 Private collection of economic rent

IJ describes 5 quite well, addresses 3 and 4, but doesn’t get into the fundamentals. As long as, and to the extent that, we have private collection of economic rent, we will continue to suffer from economic crashes. Inside Job needs a prequel explaining the root cause of the problem.

LVT better than bank secrecy or Wikileaks

Former banker Rudolf Elmer, opposed to use of Swiss bank secrecy to aid evasion of taxes by non-Swiss, has provided Wikileaks with two CD’s of (apparently incriminating) data. Who is right here? Customers were assured the data would remain secret, now it will be revealed. But aren’t governments entitled to collect taxes which they impose on their citizens? If not, why should anyone pay? If so, how can anyone’s financial affairs be private?

The answer is, none of this would be an issue under Land Value Taxation. When revenue comes from the land, government does not even need to know who the owner is. Government need only know sales prices and a few readily-observable characteristics. The tax has been paid or it has not been paid, and in the latter case a process starts which eventually will result either in the tax (plus late fees) being paid, or the land being taken by the government. (And remember, the government is necessarily the ultimate custodian of land records, a natural monopoly.)

Only land value taxation permits financial privacy.

Podcasts: appropriate agriculture, inappropriate singularity, Argentina

Podcasts can be a way to learn while doing something else. I’ve encountered some interesting ones in recent weeks.

Grow rice in Vermont? Why not? Continue reading Podcasts: appropriate agriculture, inappropriate singularity, Argentina

Ideas come from the community

In his 2003 book Copyrights and Copywrongs: The Rise of Intellectual Property and How it Threatens Creativity, Siva Vaidhyanathan notes that creative works always build on previous (often traditional and/or public domain) creative works, and that creativity will become nearly impossible if writers (or those who “own” their output) are permitted to exercise absolute monopolies over use of their products. Potential remedies include shorter and looser copyright terms, placing works into the public domain, licensing them as open source, or using another of the Creative Commons licenses.

Michele Baldrin and David K. Levine, in Against Intellectual Monopoly, provide numerous historical examples of patents retarding, rather than promoting innovation, and note the finding (p. 92, regarding the software industry) that patents were not an encouragement to research and development, but rather a substitute for them.

Now, in Where Ideas Come From (in Wired Oct ’10) Kevin Kelly and Steven Johnson sort of combine these two ideas by asserting that innovations are not the products of individuals, but of communities.

It’s amazing that the myth of the lone genius has persisted for so long, since simultaneous invention has always been the norm, not the exception … [T]here’s a related myth, that innovation comes primarily from the profit motive… If you look at history, it comes from creating environments where [people’s] ideas can connect.”

And they tie this into another kind of property rights:

One reason we have this great explosion of innovation in wireless right now is that the U S deregulated [allowed unlicensed use of parts of the] spectrum. Before that, spectrum was something too precious to be wasted…But when you deregulate– and say, OK, now waste it– you get Wi-Fi.

All in all, a very Georgist article, the authors of which have also written what I hope are very Georgist books (both coming out next month):

Steven Johnson, Where Good Ideas Come From

Kevin Kelly What Technology Wants

Getting it right on medical costs

Turns out that back in February, Kevin Carson wrote the article that needs to be written, analyzing how government regulation and protection makes medical services far more expensive (and less effective) than they could be. With a link to another article that more broadly exemplifies how government makes it impossible for the poor to support themselves.

I P and the Petro-Kleptocracy

Florida journalists Robert Block and Mark K. Matthews see it as a conflict of interest that a former Marathon Oil Director, who still owns over half a million dollars worth of Marathon stock, is working to prevent NASA, which he heads, from developing a method of creating oil from waste, algae, and seawater, while absorbing CO2. The scandal apparently is that the suspect, Charlie Bolden, sought advice from Marathon before seeking to delay the project.

Buried deep in the text is the note that Marathon has its own “proprietary microbe” to produce ethanol from wood chips. Whereas, one hopes, that a successful NASA project would produce technology available to all.

I suppose Bolden wanted, not to kill the project, but only to slow it until Marathon’s attorneys can figure a way to monopolize the “intellectual” “property” which it produces. Am I cynical?

btw, I think Tribune Company still owns the Orlando Sentinel, where this article was produced, but there is, so far, no sign of it in on Chicagotribune.com.

Patent Absurdity

New (to me, anyhow) video from Luca Lucarini about software patents. I already knew that patents seem to stifle innovation in most fields, diverting resources into trolling and defenses. I didn’t know that programmers have an incentive not to keep track of patents which they might infringe, because ignorance apparently reduces the penalty for infringement.