Paul Allen made his billions as one of Microsoft’s founders. Since retiring from his post in Windersland, Allen has invested heavily in a  number of companies, with most ending in failure. Not to be dicouraged, Mr. Allen appears to be entering a new business built on roughly 300 patents owned by a venture he funded. Many of these patents are for features and functions that most of us would consider to be common as dirt on major commercial sites.

The complaint (PDF), filed in federal court in Washington state, asserts four patents that cover e-commerce and online functions that have been staples of most websites for years. Noticeably absent from the hit list is Microsoft, which Allen co-founded in 1975 and in which he remains a major shareholder. It was filed on behalf of Interval Licensing, the patent arm of Interval Research, the Silicon Valley technology incubator Allen bankrolled in 1992. (The Register)

There’s already so much new “innovation” coming from the abuse of the patent system and the courts. It’s troubling to see one of the world’s deepest sets of pockets joining the troll business. Responsible law makers would try to fix the patent mess. Unfortunately, most of them are lawyers and patent trolling is a lawyer’s business.

If you’re a big publisher who can’t see past the dead trees on shelves business model, your goose is already cooked. While the old school music labels and Hollywierd managed to have copyright laws written to guarantee their ownership of their back catalog in any format forever, the right to to distribute electronic copies of old titles owned by authors doesn’t exist. In fact, many big name authors are self publishing electronic copies of their old works without giving a cut to their original publishers.

A bunch of really well known authors, working via their agents, have decided to route around their publishers and offer some of the most popular books of all time as ebooks directly on Amazon’s Kindle, without going through a publishing house. Among the books released through this effort are works from Philip Roth, Martin Amis, Vladimir Nabokov, Hunter S Thompson, John Updike, William Burroughs and Saul Bellow along with many others. Basically, some of the biggest names in literature from the 20th century. (Techdirt)

Of course, new author contracts include the publishers right to distribute “all formats”. That makes me wonder why any writer would want to play with any publisher.  Unless there’s a 100% guarantee you’ll have a permanent spot on the very scarce shelf space at the mega retailers, self publishing in ebook and print on demand format makes more sense.

The Russian Federation is moving to a Linux based platform choice for most government office uses –

The government is hoping to launch the first version of a “national operating system” for its computers as early as next year, a senior Communications and Press Ministry official said Thursday.

The operating system, for use on the computer systems of government agencies and state-run companies, will be 90 percent based on the open-source Linux operating system, Deputy Communications and Press Minister Ilya Massukh said.

He said use of the operating system would be optional for all agencies.

The operating system is part of the Information Society program, which the government is planning to implement from September. The program will receive 10 billion rubles ($330 million) in funding per year and includes other technology-related projects such as the creation of an “electronic government.”

The national operating system “may be one of the first targeted programs from the new raft that the government is going to approve,” Massukh said.

143m Russians using Linux? Maybe.

Linky.

Tom Silverman is a guy who has been in the music biz longer than I have been in IT. So he knows the trade and its tricks. It is refreshing to hear an insider to state that the current music model is broken —

One of the biggest problems with the old model, which has been going for 50 years, is thinking, “We’re the labels, they’re the artists, and we make money even if they don’t make money. We reduce our risk, they put their blood, sweat and tears into it, and we only give them money when we sign them and when they deliver a new album.”

In between, the only place where they get money is from their booking agent, because they’re touring. They all love their booking agent, because their booking agent gives them a check every month, or every week, and we only give them a check every year and a half when they deliver a new record — and most of that money goes to their lawyer, manager, the taxman, and making the record. Not much of it ever goes in their pocket, and that’s been true for 20 years. Unless they have a five million seller, most of that money goes into that project. Of course they don’t like the labels, because they’re not getting that reinforcement of regular cash flow. They see the labels making money, and them not making money on records.

He also considers the use of the Internet and social networking much a waste of time. Even though in this same article he admits that Susan Boyle broke thorugh on the basis of internet presence. –

No, I think you have to be out there. You have to spread the word to get exposure, but I think the problem is context. When you’re in a glutted environment, you need to differentiate yourself more than ever, so you need a great story. Story is context; it’s not content. The songs on Susan Boyle’s record are forgettable, and her performance is just okay. There are a million singers who can sing that well at least. It’s just the story that sold it. If people could learn from her, regardless of what kind of music they did — “How can I make my story so that when people hear it, they have to spread the word?” That would activate the medium more effectively than trying to get another 50,000 followers on Twitter, which doesn’t seem to do much at all.

Silverman also suggests a different management model. Using LLC’s and Silicon Valley type investment techniques. Oddly we suggested that very thing on this blog well over a year ago. And it is right.

But there are some pieces that Silverman I think is missing –

• The first is good talent is extremely common, and extreme talent is in good supply. Go into any good size church in the USA and there are probably 2 singers in the choir equal to or better than what is screamed out of Hollywood. Is that the case?

  Empirical evidence. Neil Sedaka held a contest with several radio stations as part of a record tour/sale 5-6 years ago. Thousands were screened by the radio stations. Sedaka was floored that several hundred were good enough to be considered by his measure of talent. Anecdotal I know, but good talent recognizes that in others.

  Value in many ways is a perception, especially when the goods are of a nonphysical nature. So when the perceived supply of the goods rises dramatically because consumers perceptions are altered by the sheer volume of good choice the cost curve must drop. Its supply and demand. There is a huge talent supply and only a finite consumer supply.

• The other is this one. Silverman sees it, calls it the ‘clutter the marketplace’. He is of course, right. $3k and you can foam a garage, buy mikes and stands, a 2yo PC and a midi/mixer card and have the equivalent of what a decade ago cost $500k. So anybody can be in it if they want it enough, such is modern technology.

  But again that is not the biggest issue as I see it. Look the big labels are soon to be gone. They are right now where the major studios were back in the 60’s. Then as now, every release had to be a mega blockbuster as that what the audience expected but the costs were beyond belief. The end game will be the same too. Fundamentals now are also different.

  A band, even if it does not break thru to the levels that Silverman expects which is 100k distribution as the floor. Well run the numbers at $10 per disc. $1m gross. Deduct 5% for production costs. (Yes that cheap.) Zero out distribution costs as most bands at this level would sell either direct over the internet or more likely direct at the concerts wher they make most of their money anyway So out of say $900k split 10 ways with band, light, stage men that is still $80-100k. No you won’t get overnight rich at those numbers, but that is a descent upper middle class income with unlimited upside you you do break thru.

To an extent Mr. Silverman’s lament recognized for what it is runs head long into supply chain economics. The Internet has eliminated the middle man in most cases. Producer and retailer become one. No industry is immune from it even music. And for a lack of a better analogy, iTunes IS WalMart in the music industry.

Linky

- “We are a national of laws, badly written and randomly enforced” - Frank  Zappa

The legal system continues to demonstrate it’s inability to uniformly apply the laws and in it’s complete inability to understand the Internet.

First we have the Rapidshare case. I’m sure some illicit files of copyrighted media reside on Rapidshare and may even outnumber the files that are legitimate property of the uploader. Probably the courts understand this too, but at least one doesn’t think the company should be liable for what its users upload. The decision was given by a German Court, so look for big media to try again in the US:

Yesterday, the online storage locker RapidShare announced that it triumphed in its appeal over copyright holders who demanded that the service take more steps to control online infringement. Because RapidShare does not make uploaded files publicly available (those who upload them can control access), the court found that it could not be held liable for distribution and that running filename filters on all uploads would produce too many false positives.

It’s a huge win for the site, which suffered a major setback in the case before a Düsseldorf court back in 2008. In that decision, the court found for rightsholders, and it looked as though RapidShare would have to start prescreening all uploads by file name, IP address, and other measures to preempt infringement. (Ars Technica)

Meanwhile back in Connecticut, the Attorney General continues to attack Craigs List for not doing enough to stop prostitution. Interesting counterpoint: Connecticut police routinely use Craigs List to identify and arrest….you guessed it: those who engage in prostitution:

We’ve been covering Connecticut Attorney General Richard Blumenthal’s totally misguided crusade against Craigslist on the topic of prostitution. For years, he’s complained and threatened Craigslist because prostitutes use the service. Of course, he’s never taken legal action because he must realize that there is no legal action he can take. The law is pretty clear: the liability is on the users of the service, not the makers of the service. Even so, Craigslist has repeatedly changed the way its service works to appease Blumenthal, and while he initially seems happy with those changes, months later, he’s always back to complaining (just in time for elections too…).

Of course, the point we’ve made all along in response to Blumenthal is that for smart law enforcement officials, Craigslist is an excellent tool for monitoring and cracking down on prostitution. In fact, it appears that some police in Connecticut are doing exactly that. Eric sends in the story of police in Naugatuck, Connecticut using Craigslist to crack down on prostitution in their city. (Techdirt)

While there was a rare moment of rational judgment in the German court, we continue to see politicians and the legal system continue to attack a conduit rather the the criminal. This proves that those individuals do not understand the conduit. Better to use the laws already on the books. The true test of any conduit’s limit to liability  is does it have a legitimate use and if so, does it have a policy against illegal use? If so, that conduit must be allowed to operate and cannot be held accountable for the actions of individuals. More often than not, the courts and pols have often been guilty of doing something akin to  accusing the highway department of not doing enough to prevent the free movement of criminals on streets. I presume those who prosecute conduits instead of concentrating on crimnals who use them are just uninformed. The alternative would make them anything but a servant of the public interest.

If you’ve been a Third Pipe reader for long, you’ve seen more than one of my rants about how the patent system has been perverted into an innovation stifling institution. Innovation isn’t limited to technology. About the time our education system started graduating more attorneys than could be productively employed, the under employed ones began innovating to crate work for themselves. By pushing the envelope on intellectual property laws, patent and copyright have devolved into frameworks for running legalized protection rackets. While there are legal battles, the only clear winners appear to be those who provide legal advice and representation to the warring parties. Things have gotten so bad, that any successful innovation or product is likely to face a patent or copyright challenge. That’s not the end of the world for a conglomerate or offshore enterprise, but it’s a killer for the little guy. The modern patent system  not only stifles the creative, it’s also a start up and small business killer. That’s not only a great way to slow the economy, doubly bad for those whi need to find a job or start a business to survive.

Want to learn more about our up is down wrong is right Patent System? Check out Patent Absurdity. It’s free to stream or download.

Patent Absurdity explores the case of software patents and the history of judicial activism that led to their rise, and the harm being done to software developers and the wider economy. The film is based on a series of interviews conducted during the Supreme Court’s review of in re Bilski — a case that could have profound implications for the patenting of software. The Court’s decision is due soon… Patent Absurdity

The last decade has been filled with a flurry of new laws that have made the simple act of copying music from a CD your own to a portable device an act of piracy in most western nations.  While its founding comes as an offshoot to the equally extreme philosophy of the Pirate Bay torrent site in Sweden, that country’s Pirate party has given voice to the ordinary citizen in copyright matters.

Sweden is not alone. A Canadian Pirate Party has just been granted official status.

We are pleased to announce that as of April 12, 2010, the Pirate Party of Canada is officially eligible for Party Status.After ten months of dedication and hard work, we have reached eligible status, which only leaves a 60-day “purgatory” period. After that, we will field candidate in subsequent federal elections, and begin the real work of a political party.

This day wouldn’t have arrived without you, the people of Canada. When we sent out the call for forms, you answered. Boy, did you answer. With the bare minimum of 250 forms being reached in such a short amount of time, we were shocked to see the confirmation forms all in within the space of a month. It goes to show that you, normal Canadians who really run the country, care about what goes on behind the scenes, in the dark, closed board rooms and at the negotiating tables of ACTA, the RIAA, and the CRTC. You’ve shown that we aren’t going to take the indignity of losing technological and cultural rights, so that record labels and big companies can further gouge us. Pirate Party of Canada

When laws enacted to discourage real theft for resale result in leaning too hard of the common citizen, people react in mass. With the open internet, social media, and crowdsourcing, any government is likely to meet a virtual mob with torches and pitchforks when it goes too far.

For the American pols who believe the activist fervor of the Swedish and Canadian pirates  will never take hold in the once free land of the DMCA, they should think again. There are already at least TWO pirate organizations with large public support.  Pirate-Party.us AmericanPirateParty.us

Editorial comment: Third Pipe does not advocate the theft of intellectual property or media either personal use or resale.

The Obama Administration’s war on technology firms continues as the Justice Department begins looking into competitive hire agreements between some of America’s top tech powerhouses.

The Justice Department is stepping up its investigation into hiring practices at some of America’s biggest companies, including Google Inc., Intel Corp., International Business Machines Corp., Apple Inc. and IAC/InterActiveCorp., people familiar with the matter said.

The inquiry is focused on whether companies, particularly in the technology sector, have agreed not to recruit each others’ employees in ways that violate antitrust law. Specifically, the probe is looking into whether the companies’ hiring practices are costing skilled computer engineers and other workers opportunities to change jobs for higher pay or better benefits. (Wall Street Journal)

In any industry, hiring away any key player or developer of intellectual property is potential  fodder for lawsuit in the corporate world. Rather than resolving the underlying problems in the copyright, patent and intellectual property laws, Congress has seen fit to put in place even more draconian laws that have kept legal specialists in the field fat and happy.

In the current legal environment, if you have worked with or developed trade secrets at your current employer, hiring you is very risky for any competitor putting a real chill on your chances. If the Justice Department had any interest in making the marketplace more competitive for our finest minds they would recommend a complete, well informed re-write of intellectual property statutes. While they are at it, a recommendation to Congress to  repeal Sarbaines-Oxley is also in order. That would provide a more robust ecosystem of tech companies by putting going public back in the reach of the average Joe.  Given the opportunity, many of the best and brightest would rather roll their own instead of serving the corporate masters.

Simply investigating why the tech giants  have made agreements to prevent more litigation in the current environment isn’t only misguided, it’s condescending to the parties Justice claims are being harmed.

Here’s a surprise for you . The cost of complying with all of those alphabet soup Federal security regulations has actually trumped securing intellectual property.

A paper by Forrester Research, commissioned by Microsoft and RSA, the security division of EMC, found that even though corporate intellectual property comprises 62 percent of a given company’s data assets, most of the focus of their security programs is on compliance with various regulations. The study found that enterprise security managers know what their companies’ true data assets are, but find that their security programs are driven mainly by compliance, rather than protection.

“Despite the increasing mandates enterprises face, custodial data assets aren’t the most valuable assets in enterprise information portfolios. Proprietary knowledge and company secrets, by contrast, are twice as valuable as the custodial data. And as recent company attacks illustrate, secrets are targets for theft. Compliance, not security, drives security budgets. Enterprises devote 80% of their security budgets to two priorities: compliance and securing sensitive corporate information, with the same percentage (about 40%) devoted to each. But secrets comprise 62% of the overall information portfolio’s total value while compliance-related custodial data comprises just 38%, a much smaller proportion. This strongly suggests that investments are overweighed toward compliance,” the Forrester analysts found. (Threatpost)

It’s a no brainer that the compliance is causing business to under invest in securing trade secrets. For those of you who are anti-business, you should remember that “trade secrets” includes customer data.  This is proof positive that too many federal agencies are doing harm by trying to micro manage private IT security.  The last thing we need is a drag on the information technology industry when business and employment are hurting. Unless we control the urge of bureaucrats to reach ever deeper into IT departments, we’ll likely see more of them move off shore, along with the corporate base that backs them.

… In Hungary? Yeah I know, Ole Tux is just an OS. That is what I thought too. Still do by the way. But in Hungary a political party — Jobbik — has sprung up.:

We are going to implement open standards in the public sector and will promote the spread of open source solutions among the general public and among businesses. Under these directives, government and public sector documents can be stored only, in open document formats, on systems running open standards applications.

We are going to develop open standard interfaces, in order to encourage municipalities, the tax department, the banking sector and public offices to use open source solutions.

We are going to supply government funded and developed applications for municipalities, nation wide, to eliminate parallel and wasteful developments.

When both proprietary and open source software will be available with the equal functionality to accomplish a particular task, we will make the use of open source solutions, mandatory.

We are going to implement open standards in the school system and will introduce open source computing as a subject in schools, under the discipline of computer sciences.

That ladies and gentlemen is the Jobbik party platform. Sound wild? Well I will just direct you to Sweden where the Pirate Party has a foothold in Parliment after raising petitions and funds on the Pirate Bay file sharing suit. They now have over a dozen affiliated Pirate parties in the world. So it would not be far fetched at all.

Linky.