The Informationist, a blog written by Bruce Abramson

So...Should we Have Software Patents?

The WSJ decided to weigh in on this question yesterday, by presenting something of a debate.  Yet this article, like most such discussions, misses the basic point.

Are exclusive rights, of the sort that define our IP systems, potentially useful in motivating innovative software development?  Absolutely.

Can the bundle of rights that we use successfully to motivate innovation in pharmaceuticals similarly motivate innovation in software?  Not a chance in hell.

By bifurcating all IP into the buckets of patent and copyright, we shoehorn innovations where they have no right being.  Our patent system offers a uniform set of rights to innovators in all industries, independent of: up-front capital needs; likelihood of success; typical time from investment to return; ability to divert work if you are not first past the post; and relationship between innovation and product.  While judges may vary their ruling by industry, they have no statutory right to do so--it represents clear activism from the bench.  And to make matters worse, we imposed this uniformity on patent systems around the world via international treaty (TRIPS).

The debate over software patents will continue until we do the sensible thing: craft a set of rights tailored to the needs and incentives of software innovators.

I wrote about one such system more than a decade ago.  I was not the first.  I was not the last.

And I am not holding my breath.

 

A Bit More on Bitcoin

Bitcoin, the digital currency, continues to generate interest.  Today's WSJ weekly interview with Gavin Andresen, Bitcoin's lead software developer, provides a teriffic quick summary for those not yet up to speed.

But it also provides all of the information necessary to appreciate why the grand claims that some make for its future are pipe dreams. 

Republicans on Copyright. Or at least, Some Republicans on Copyright.

An interesting story pulled together a couple of my different worlds last week:  The Republican Study Committee (RSC) posted an analysis of copyright law. 

The Problem with the Polls

Though I am writing this essay as Americans cast their votes, it is not a partisan piece and I am not writing as a partisan.  I am writing as a statistical scientist, someone who has spent nearly three decades considering issues related to measurement and modeling.  From this vantage point, I issued my only prediction of this election cycle: The polls are wrong.  All of them.  By enough to ensure that future textbooks will contain entire chapters assessing the lessons of 2012.  This essay expands upon that prediction.

My prediction arises from a few fundamental beliefs and observations: 

Career Advice - or a Lesson from my Past

In 1987, I wrote my Ph.D. dissertation on heuristic search.  My specific topic was the use of statistical decision-making in two-player games.  I drew concrete examples from Othello and Chess, ran simulation studies, and provided a theoretical (mathematical) proof of my thesis.

My basic thesis was simple: In the parts of a game that are too complex to search in their entirety, the best move to make against an expert opponent is the same as the best move to make against a random player.

Statistically speaking, it boils down to "If you can't be certain about the future, maximizing expected value is a good idea."

The chess programming community was up in arms.  The mere concept that random play and expert play bore any similarity to each other was heretical.  The luminaries of the time, including much of the team that trained the Deep Blue team, insisted that it could not possibly be true.  (Personally, I thought it was too blindingly obvious to warrant a Ph.D., but I guess I was wrong).  They insisted that only deep, chess-specific knowledge could defeat a champion.

Turns out, they were wrong.  Statistics and I were right.

See here: Why Bruce was Right (not the actual headline).

Lesson of the day: When conventional wisdom runs against mathematics, stand with conventional wisdom if you want to get promoted.  Stand with mathematics if you want to be right.

Why Quality Expert Witness Work Matters

So Oracle won its big battle with Google.  Sort of.  In Phase I of the fight over whether Android made inappropriate use of Java, a jury ruled today that Google did, in fact, use Oracle's copyrighted products without authorization.  The jury could not, however, determine whether Google did anything wrong because it could not rule on fair use.  Was it fair or improper for Google to use Java as it did?  We don't know.  And since what Oracle really wanted was damages, it's not clear how to proceed with the damage assessment phase (which might be Phase II, or might be deferred until after the patent component of the case).

If the jury couldn't determine the fair use issue, it stands to reason that the two sides were equally persuasive--or unpersuasive.  Whose job is it to get this information out?  Typically, that task falls to an expert witness.   

TROLLS, WIZARDS, AND THE PITFALLS OF PATENTING

Cross-posted at Breitbart.com.

 

Patents are back in the news.  In the past few weeks alone, Microsoft bought AOL’s patent portfolio for $1 billion, then resold much of it to Facebook for $550 million. Twitter pledged to use its patents only defensively, and to give its employee-inventors a say in the company’s future patent litigation strategy.  Controversial trials, appeals, rulings, and awards continue—prompting the Wall Street Journal to publish Andy Kessler’s call for curtailing the rights of non-practicing entities (NPEs), also known affectionately as “trolls.”

The Aftermarket Economy

Cross-posted at Breitbart.com's BigGovernment

So Facebook filed its IPO papers, and the numbers are eye-popping.  The company appears to be worth about $100 billion, or a bit more than the GDP of Tunisia.  Others shade it a bit lower, but one thing is certain: it’s good to be Facebook.

Facebook is special because, in network economic terms, its product is a platform, and successful platforms are few and far between.  For all its bells and whistles and features and privacy policies, Facebook remains—at heart—a place that people hang out.  As the proprietor of a popular hangout, Facebook gets to write the rules guiding all the folks who think it’s a good place to pitch their businesses or to make some sales.  In network economic terms, these businesses operating inside Facebook’s business comprise an aftermarket.

The Law & Economics of Aftermarkets

Coming up tomorrow (Tuesday 1/31): my one-hour intro to the law & economics of aftermarkets.  If you or someone you know plans to make money selling aps for the iPhone, Android, Facebook, or any other proprietary market, you need to know this stuff!

http://rimon.eventbrite.com/

What do Tech Investors Want?

Cross-posted at breitbart.com's BigGovernment

Last week, Google announced its plans to acquire Motorola Mobility, effecting a vertical integration from the Android operating system into hardware.  Investors responded by shaving roughly 13% off Google’s value—roughly twice as much as the NASDAQ lost and three times as much as the Dow.

A few days later, HP announced its plans to shed its PC division and acquire a software company.  The combined effect will be a shift from hardware—long HP’s mainstay—towards software.  Investors responded by knocking close to 20% from its value in a single day.