The Pebble and the Avalanche

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Current Revolutions in Business and Technology

by Dr. Moshe Yudkowsky,

author of The Pebble and The Avalanche: How Taking Things Apart Creates Revolutions

 

Tue, 2009-Dec-22, 15:51

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Patent Troll

A patent troll continues to prevail in its lawsuit against Microsoft. Given that the underlying patent at issue is absurd and that the troll company has (in my opinion) done nothing to advance technology, this lawsuit illustrates once again how far the patent system has spun out of control.

One possible benefit: maybe Microsoft will support a rationalization of our patent laws.

Fri, 2008-Jul-25, 09:17

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Can It Be Turtles All the Way Down?

I'm a big fan of open source software, and I found some very interesting speculation on the TechDirt web site. The author asks if Google has trouble absorbing acquisitions because the upper layers of Google's software are highly proprietary.

This speculation also raises the question of just how far open-source software can penetrate a company's operations. Can it be "turtles all the way down," or does it make sense that at some point — at the highest layers — software must include some proprietary, unique approaches?

Wed, 2008-Jul-02, 10:00

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Mixing Civil and Criminal Law

Federal prosecutors indicted Atul Malhotra for passing a confidential memo from his previous employer (IBM) to his then-current employer (HP, which recently terminated him).

I admit that I'm highly puzzled by the philosophy of this case: Why is the government involved? Why is this alleged action a criminal act? Theft of intellectual property may properly result in a lawsuit over damages, but I am surprised that the government claims police power over transfers of knowlege.

Mon, 2008-Jun-30, 08:57

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Uniting Against Patent Trolls

The Wall Street Journal reports today that Google, Cisco, Verizon and other large companies created an alliance to defend themselves against patent trolls. The alliance, which will be called Allied Security Trust, will purchase patents, grant nonexclusive licenses to all members, and then resell the patents.

By reselling the patents, the alliance avoids any hint of non-competitive behavior, and at the same time the alliance members are shielded against disputes over those particular patents. The alliance will work with Intellectual Ventures LLC, a large patent-hoarding firm that — currently — doesn't plan to generate revenue via trolling.

This may be good business but it's likely to be ultimately bad policy for the member companies and disastrous for the industry as a whole. The alliance creates a market for otherwise worthless intellectual property, which is likely to drive up prices and encourage the creation of even more worthless patent claims, which will driver costs for the alliance members ever upwards. Smaller companies that cannot join the alliance will be required to purchase licenses — once a large company establishes the precedent, the owner of the intellectual property has a stronger legal claim to patent royalties.

Finally, I believe that the industry giants will soon surrender to the temptation to regard the problem of patent trolls as solved; but they and the industry as a whole must continue to push for comprehensive patent reform before patent trolls strangle the innovations that drive the US economy.

Tue, 2008-Jun-17, 12:00

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Associated Press Follies Continue

Apropos of this morning's blog post: as of today, for only $12.50, you can quote five words from an AP press release!

Tue, 2008-Jun-17, 08:59

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Two Business Models, Two Companies, Two Blunders

Two different companies are in the news today as they attempt to cope with the Internet.

The first company is Associated Press. AP decided to create their own "fair use" policy and they've sent "cease and desist" letters to bloggers that quote brief snippets from AP news stories. As noted on Techdirt, AP doesn't have the legal authority to determine its own private version of the fair use doctrine — fair use is a legal concept which grants people certain rights, and the doctrine exists whether or not AP agrees to it. I support Techdirt's decision to avoid quoting the Associated Press henceforth — if AP doesn't want the free publicity, which makes their news more valuable and their company more profitable, then by all means let's not give them any free publicity.

The other company is Sony, which is more or less famous for the extent and egregiousness of their blunders, such as installing dangerous spyware on millions of computers. Sony is about to release a new direct-to-DVD television show; to promote the show, Sony will make a few eight-to-ten minute long condensed versions of the episodes available online.

As usual, Sony's obsession with control over "content" results in poor marketing decisions. If Sony makes a few complete episodes online, viewers could see the episodes and then decide to purchase the DVD. By making just snippets available online, viewers who want to see complete episodes may turn to file-sharing services instead; at that point, why bother purchasing the DVD from Sony? Obsession with control leads to loss of control.

Fri, 2008-May-30, 09:00

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Apparently, It's Not Theft If You Work for the Music Industry

MediaDefender works on behalf of the music industry; their goal is to shut down any Internet-based activity that the music industry doesn't control. As might be expected from an industry that's attempting to enforce an untenable position, MediaDefender quickly adopted questionable tactics, such as using false-flag operations to "poison" file sharing networks and put spyware on people's computers. Now we have learned something new: part of MediaDefender's modus operandi is to sneak into legitimate file-sharing networks and steal bandwidth.

This became part of the public record when MediaDefender "accidentally" launched a massive Denial of Service attack against Revision 3, a company that uses file-sharing to distribute its videos. Revision 3 noticed a security hole and fixed it; MediaDefender's servers promptly crippled Revision 2 by sending 8,000 packets per second to Revision 3's servers — which took down Revision 3's web site, RSS feeds, and even internal email.

The FBI is investigating. Since HP eventually proved liable when its investigator hirlings were caught acting illegally, maybe we'll all get lucky and the same thing will happen to the people who hired MediaDefender.

Tue, 2008-Jan-08, 08:00

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Buy Movies Legally, Seller Goes Bankrupt?

Here's an interesting tale of a man who purchased a new monitor, hooked it up to his Windows computer, and promptly found that the computer refused to let him see any of his movies. The culprit is digital rights management (DRM) software, which worried that he might pirate a movie because his monitor worked so wonderfully. The upshot is that because he purchased movies legally, he is in worse shape than if he just pirated them from the Internet.

As usual, the culprit in this case seems to be Microsoft, specifically their DRM software which they can't seem to figure out how to support. But I also have to wonder about the costs of doing business. This particular buyer was highly motivated and intelligent, and managed to get at least some of the problem straightened out, even though it cost him time and effort. At the same time, the cost to the companies involved — the company that sold him the movies as well as Microsoft — was also quite substantial. If the customer had made the simple mistake of following the DRM's recommended procedures, he would have had to consume even more technical support from other companies or sustain an actionable, substantial monetary loss. In short, the costs of supporting DRM continue to increase, and there's no evidence whatsoever that all this nonsense is making any difference when it comes to pirated content anyway. If DRM chews into a company's slim profit margins, then even though Hollywood wants to impose DRM management on the company selling movies, no one will be able to afford DRM — least of all the companies that must cope with it.

Tue, 2007-Nov-20, 06:25

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Your Personal Bill: $4.544 Billion for Infringement

The U.S. Constitution allows for copyright and patents in order to promote the free dissemination of ideas and inventions. Today's copyright laws were written for the specific purpose of protecting Disney from losing its exclusive rights on old Mickey Mouse movies; over the past decades, each time the copyrights on films from the early years were about to expire, Congress modified the laws to extend Disney's franchise.

If you take the copyright laws and court decisions seriously, and total up the "infringements" for which you have legal and possibly criminal liability, a professor at the University of Utah shows that an average person — in the course of a year of ordinary activities — may be liable for up to $4.544 billion per year in penalties.

Fri, 2007-Jun-29, 10:35

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Turning Your DVDs Off by Remote Control

A company called Kestrel Wireless is pushing a bit of scary technology: a way to exercise remote control over DVD disks — not players, disks. Kestrel, pushing the idea that 10 to 15 percent of all new-release DVDs in the US are stolen, wants to implant radio chips in each DVD. An "optical shutter" built into the disk will obscure the contents of the DVD until it's turned on at the point of sale. The idea is similar to removing tags from clothing at the cash register: stolen DVDs are useless because they aren't activated.

I find this idea particularly scary — not because it prevents theft, but because it opens the door to abuse. What can be turned on can, obviously, be turned off again. Now imagine how this technology can be used by the MPAA and other villians, using their clout over DVD equipment manufacturers. A new generation of DVD players can also have this radio technology built in. At the time of purchase, the DVD is registered to you as the owner — and if it shows up in anyone else's DVD player, the radio chip disables the DVD, rendering it useless, in order to prevent "theft" of the DVD's content. While this all remains hypothetical, it's a scenario consistent with the MPAA's constant efforts to redefine the meaning of ownership (to the MPAA's advantage).