Tim Richardson

Melbourne, Australia

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Tim Richardson: Professional Pages



Patent trolls and property-rights goblins: What Harry Potter can teach us about patents and property rights

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Imagine that the only people who could drive cars were those who built them with their own hands. That’s the logical territory of many attacks on patent “trolls”.

I strongly dislike the term "patent troll". According to what I read, a "patent troll" is someone who owns a patent, and enforces it without being the inventor of the patent, or without using the patent in production. Ownership without invention or production is what makes them a “troll” as opposed to a "morally legitimate" owner of the patent.

As this NPR transcript (When Patents Attack) explains, a troll is a scary creature who makes you pay to cross a bridge. It's taken for granted that the troll did not build or buy the bridge. The troll is a thief and a bully; dim-witted and seeking to get its way by violence. The troll arrives at the bridge, chases off or kills the real owners, and then extracts tolls from travellers seeking to cross the bridge. The term is derogatory, although apparently not libellous. I'll go out on a limb here: the troll's behaviour is not acceptable in civil society.

But in all the discussion of "patent trolls", I haven't come across the accusation of stolen patents (or murder). The inventor and the “troll” mutually entered an agreement to transfer ownership. Transfer of property rights happens all the time. Someone may construct a shop, and then sell it to someone else, who then charges rent to a tennant. Such transfers of exclusive access to property are common. No one calls the new owner a “property troll” because they neither built nor occupy the shop. The new owner is simply an intermediary who is good at managing property, just as the original builder is good at financing and managing construction, and just as the tenants are good at running a shop. I'd guess that in Australia and America, this accounts for the vast majority of commercial property.

Harry Potter fans may recall the attitude of goblins to things they make (such as the sword of Gryffindor). Apparently, even though goblins make things on order from wizards and take payment for these objects, they don't really believe that ownership passes out of the hands of the craftsman (craft-goblin) who made it. They don't really recognise that the party they sold the object to can transfer owership to someone else. You show me a patent “troll”, and perhaps in the mirror I'll show you a property-rights goblin. I detect some kind of belief that only the original inventor has a right to enforce patents ... some kind of moral right that can not be transferred to a third party. Well, that sucks if I happen to be the owner of IP I'd like to sell to someone (be it a patent, a song or a story). If I can't fully transfer my right to someone else, then you're taking control (or partial control) of my IP. Without compensating me for it.

Patent recognition and enforcement may be badly broken when it comes to software. But a patent is a legal right to intellectual property, and it should be fully transferrable, just like a $100 bill is transferrable. If that patent is not fully transferrable, then it's worth less. By reducing the value of a patent, you are stealing from people who own patents, which includes inventors. 

For the record, I think the USPO was right when it didn't recognise software patents because they are the same as attempts to patent algorithms. As a computer science graduate, I know there are extremely strong grounds for considering software to be a mathematical expression (and mathematics can't be patented). So it is software patents which are broken. The problem is not IP owners exerting their rights. The problem can't be allowing an IP owner to sell or licence IP to a third party. Interference in property rights is a huge step. The patent system may be a mess, but interfering with property rights is a nuclear option. Fixing software patents solves the problem. Trying to stop patent trolls as a alternative would not fix software patents, and would have disastrous side-effects.

Last Updated on Tuesday, 09 August 2011 22:25
 

Business Plans need to show unique points of difference and barriers to entry

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What's the point of a business plan? If you think there's one answer to that question, you're heading down the path of failure

Last Updated on Friday, 01 July 2011 10:42 Read more...
 

The collapse of Borders and Angus & Robertson in Australia: a victory for government policy

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A day after my interview in BRW was published, Angus and Robertson goes into administration. There is an A&R store at the corner of Elizabeth and Bourke St in Melbourne CBD, a prime retail location. Before Christmas, the store was busily promoting products ... no surprise. But they were not promoting books. The biggest effort was for a $60 Chinese telescope. They had given up on books.

Last Updated on Tuesday, 09 August 2011 22:23 Read more...
 

Why online retail creates jobs, not destroys them

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Big retailers have started a campaign against the five-year-old $1000 personal import allowance. The model for the campaign is the mining industry's campaign against the resource tax proposal of the Rudd cabinet. The miners convinced Australians that a tax increase would harm jobs and investments. The retailers are now trying to convince us of the opposite: that the only way to save jobs is a tax increase. This is an economic fallacy simply wrong.

Last Updated on Friday, 07 January 2011 14:48 Read more...
 

The value of measuring and reporting: How Wales sunk England

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Every five years, the OECD publishes a comprehensive survey of education in developing countries.

Among developed nations, the United Kingdom has gone backwards over the last two surveys. Analysis by the Economist shows that in the United Kingdom, results from English schools have been steady; the decline is mainly due to Wales. What happened in Wales? Authority for education was devolved to the new Welsh Assembly, which decided to stop publishing league tables of schools. League tables are school-by-school performance information (such as the recent "MySchool" website available to Australians). The Economist claims that the Welsh example proves one of the OECD's key findings: a key indicator of the strength, and improvement, of a school system is whether educational performance of individual schools is published allowing parents to compare.

Two results caught my eye because they have wider implications.

First, there is a clear connection between holding schools accountable, and results achieved, but only as long as schools have a chance to influence the results. This is commonsense. Publication of results has a clear link: Wales has gone backwards. The report also says that external standardised exams correlate to strong performance.

"Within countries where schools are held to account for their results through posting achievement data publicly,
schools that enjoy greater autonomy in resource allocation tend to do better than those with less autonomy.
However, in countries where there are no such accountability arrangements, the reverse is true."

Secondly, a focus on small class sizes doesn't help outcomes. I've heard this before, but I never understood why this was true. It stands against commonsense: the smaller the class size, the more attention a student gets from the teacher. That has to be good, so strange that it's not true. Now I see why. Smaller class sizes means more teachers are required. If you need more teachers, and everything else stays the same (such as salaries), then getting the additional teachers means lowering standards. But if you let class sizes grow, you need fewer teachers. Even if you did nothing to salaries, you could keep the best teachers and raise the overall standard. However, the best systems make a stronger tradeoff. Rather than saving money by having fewer teachers, they trade off by paying more money to the fewer teachers, and they make sure that more money means better teachers. And the results prove that better teachers outweigh larger class sizes. For more, see this

The OECD study is available here.There are some real surprises in the results: streaming by student ability does not lift overall results, but it enhances the impact of socio-economic background (so it's bad, basically). The systems which are more likely to hold children back to repeat are lower performing systems. Students at private schools do better, but the difference is almost entirely predicted by their stronger socio-economic backgrounds: the private schools themselves don't make much difference.

Last Updated on Tuesday, 11 January 2011 14:42
 

Harvey Norman, GST and online retail: lashing out

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Australian retail is facing big changes: big, but predictable. Online retail is getting substantial traction in a widening range of categories. Some large traditional players are passing beyond the denial of the past few years, and haved moved on to anger: they blame the $1000 GST personal import exemption.

Here's a story illustrating the trouble: An acquaintance spoke to me last week about a camera he wanted to buy via ebay from Hong Kong. Although he had discovered that Canon offers international warranties,  he still had concerns: his first purchase from overseas. My friend is busy: he runs his own business, and is a parent of young kids. He doesn't have a facebook account. Kudos to Harvey Norman, because it was his first destination for a price match. Unfortunately, Harvey Norman could not get closer than a $600 gap (which is around a 50% surcharge to the online price). My friend told me that he would have felt like an idiot and a fool buying it from Harvey Norman, so he bought it online.

Gerry Harvey thinks it is unfair that consumers importing should have a $1000 GST-free threshold. The Australian threshold is high compared with EU countries, but with price gaps like that, it's not going to make much difference.  I saw the same acquaintance last night; he was still telling people about the price difference. This was at the kindergarten Christmas party: you can hardly imagine a group more likely to be in the market for new cameras. Word of mouth with continued references to "fool" and "idiot" must be making an impact, and for sure he isn't the only one to make such a price comparison. Online retail has been cheaper for a while. But now, the word is out; it's getting beyond early adopters (and the headlines grabbed by bashing the personal import allowance can't help).

Last Updated on Thursday, 23 December 2010 20:55 Read more...
 
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